ANNUAL REPORT
2020
24
07 CEO letter
10 Our strategic priorities
19 How we create value
90 Co-Chair's
introduction
91 Board profile
95 Board report
104 Remuneration
report
117 Declarations
188 Independent
auditor's report
197 Alternative
performance
measures (APMs)
199 GRI Index
204 TCFD Index
205 SASB Index
207 ESG performance
summary
210 Glossary of
abbreviations
and key terms
212 Shareholder
information
120 Consolidated
financial statements
126 Notes to the
consolidated
financial statements
171 Parent Company
financial statements
175 Notes to the Parent
Company financial
statements
186 Other information
Strategy and
value creation
Business
performance
Corporate
governance
Financial
statements
2
1
4
5
6
Other
information
7
Risk management
& compliance
30 ESG at a glance
31 Our approach to
sustainability reporting
37 Our approach to
climate change
39 Sustainability strategy
52 GHG emissions
and energy use
53 Water and waste
60 How we create value
for our communities
66 Our employees
70 Health and Safety
76 Our approach
to sustainability
governance
Sustainability
3
78 Enterprise risk
management and
internal control
81 Strategic risks
83 Operational risks
85 Financial risks
86 Regulatory risks
87 Compliance
21 Business
performance
26 Management
discussion and
analysis
P
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COLLABORATION
Working across our diverse
cultures with mutual
respect, inclusion, drive,
and innovation
AGILITY
Working dynamically and
swiftly to capitalize on
opportunities and adapt
to change
EXCELLENCE
Working with an
emphasis on safety,
ownership, and integrity
We promote
a culture of
CARE
VALUES
RESOURCEFULNESS
Working diligently
and proactively to create
exceptional value for all
our stakeholders
OCI N.V. is a leading global producer
and distributor of nitrogen and
methanol products providing lower
carbon fertilizers, fuels, and feedstocks
to agricultural, transportation, and
industrial customers around the world.
OCI’s production capacity spans four continents
and comprises approximately 16.2 million metric
tons per year of nitrogen fertilizers, methanol,
diesel exhaust uid, melamine, and other
nitrogen products.
OCI has more than 3,600 employees, is
headquartered in the Netherlands, and listed on
Euronext in Amsterdam.
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other informationSustainability
OCI N.V.
Annual Report 2020
3
2020 PERFORMANCE HIGHLIGHTS
Total equity
2019: $2,819M
Earnings/(loss)
per share
2019: $(1.598)
Gross debt
2019: $4,662M
Net debt
2019: $4,062M
Free cash flow
2019: $128M
Adjusted EBITDA
2019: $748M
Adjusted net
income/(loss)
2019: $(208)M
Total assets
2019: $9,420M
$2,672M
$4,417M
Lost time
injury rate
2019: 0.16
Total recordable
injury rate
2019: 0.40
Women at OCI
2019: 10.34%
Compliance
training enrollment
2019: 95%
Occupational
illness rate
2019: 2.97%
GHG intensity*
MT CO
2
e / ton produced
2019: 2.30
Energy intensity
GJ / ton of ammonia
produced
2019: 36.96
Water Intensity
M m3 consumed / ton
produced
2019: 2.17
Employee
turnover rate
2019: 1.99%
Revenue
2019: $3,032M
$3,474M
DRIVING BUSINESS VALUE
FINANCIAL
ESG
* Please refer to page 39 for a description of how we calculate GHG intensity.
OCI N.V.
Annual Report 2020
4
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other informationSustainability
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Sales by product
Cleaner fuels and feedstocks
Methanol, bio-methanol, DEF, and
green ammonia sold in 2020
•
Other
78%
•
Cleaner fuels
and feedstocks
22%
Our customers
•
Fertilizer use
74%
•
Industrial use
26%
Our employees
Employees in 2020
•
MENA
70%
•
Europe
19%
•
North
America
11%
•
Ammonia
13%
•
Urea
39%
•
CAN
9%
•
UAN
12%
•
AS
5%
•
Melamine
1%
•
DEF
6%
•
Methanol
15%
Sold in 2020
Our business
Our production facilities are located in the United States, the Netherlands, the
United Arab Emirates, Egypt, and Algeria. We are able to produce and distribute
approximately 16.2 million metric tons per year of merchant ammonia, granular urea,
calcium ammonium nitrate (CAN), urea ammonium nitrate (UAN), ammonium sulphate
(AS), methanol, diesel exhaust fluid, melamine, and other nitrogen products, serving
agricultural, transportation, and industrial customers around the world.
Our position in the value chain
Raw
material
input
End-
consumer
Production Storage
Wholesale
distribution
Our business model
2020 PERFORMANCE HIGHLIGHTS
Production assets
Warehousing capacity
Distribution / JVs
Revenue by segment
$3,474M
Revenue in 2020
•
Nitrogen
80%
•
Methanol
20%
Adjusted EBITDA by
segment
Adjusted EBITDA in 2020
•
Nitrogen
83%
•
Methanol
17%
OCI N.V.
Annual Report 2020
5
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other informationSustainability
Strategy
and value
creation
07 CEO letter
10 Our strategic priorities
19 How we create value
OCI N.V.
Annual Report 2020
6
CEO
LETTER
Our purpose:
Cultivating a
more
sustainable
world
through
cleaner fuel
solutions,
lower carbon
feedstocks,
and
food security
Dear stakeholders
Resilience in 2020, and a favourable market
outlook for 2021 underpinned by healthy
fundamentals
As we look back to what turned out to be
a volatile year due to the global challenges
because of COVID-19, our priority was to
keep our employees, their families, and our
surrounding communities safe. I assumed the
role of CEO amidst the global turmoil, and I
was immediately impressed with the support,
teamwork and vigilance of our employees
across our platform during these difficult times.
I would like to thank our whole team for their
incredible resilience.
We are fortunate that the pandemic has not
had a direct impact on our operations or on
our global supply chain to date, as our
products are essential for global food security
and crucial for the continuity of the supply
chains of many industries and consumer
products.
We are therefore particularly pleased that we
delivered solid results in 2020 by achieving
record volume growth and healthy cash
generation. We achieved a reduction in net
debt of $332 million during 2020, despite
selling prices for all our products nearing trough
cycle levels during the year and on average at
materially lower levels than in 2019.
Looking ahead into 2021, we are starting
to benefit from a significantly improved
outlook for all our end markets. Particularly
nitrogen markets are underpinned by healthy
fundamentals as corn and other crop prices
rise to levels last seen in 2012. This is highly
supportive of farm economics and as a
result, nitrogen demand and prices. Against
this backdrop, we look forward to delivering
another year of robust volume growth and cash
generation in 2021.
Health and safety first
We are pleased that our safety performance
continued to be best-in-class, despite the
prevalence and challenges of COVID-19.
We achieved record occupational safety
results in 2020, resulting in industry leading
performance. The lost time injury rate (LTIR)
of 0.09 and total recordable injury rate (TRIR)
of 0.23 are well below our internal targets and
reflect a 44% improvement over 2019 despite
a more difficult operating environment due to
the strict COVID-19 safety precautions in place
since March 2020.
We are proud of every employee’s diligence
and attention to safety, which has brought
our TRIR down by 72% since 2014. We will
continue to promote a strong safety culture
and focus on targeting zero injuries across our
organization, both with our own employees and
with contractors, with focused attention to this
from the Board and in the HSE & Sustainability
Committee.
Business performance
Strategy and value creation
Risk management and compliance Corporate governance Financial statements Other informationSustainability
OCI N.V.
Annual Report 2020
7
A Culture of OneOCI
In addition to our environmental targets, we are
also strengthening our group culture. OCI has
grown exponentially over the last decade, and
the focus was on creating strong local teams.
During the year, we launched the OneOCI
platform, which brings together the best of
OCI under one unified culture, a shared set of
values, and a platform to encourage dialogue
across our locations.
We are fortunate to be an employer of choice
for a culturally diverse workforce that includes
25 nationalities in 10 countries. Through
the roll-out of our OneOCI platform and
our Diversity & Inclusion (D&I) program, we
have set a target of achieving 25% female
representation in senior leadership positions
by 2025. Though we operate in traditionally
male dominated industries, we are working to
improve our gender diversity in both technical
and non-technical roles and at all levels of our
organization and in all locations, including the
MENA region.
A differentiated ESG strategy focused on
capitalizing on the hydrogen opportunity
I am pleased that we introduced our ESG
strategy during our first Capital Markets
Day in March 2021, where we detailed how
OCI can capitalize on the global hydrogen
opportunity and announced significant steps to
decarbonize.
As part of the accelerated global shift to
clean energy, hydrogen will play a vital role in
achieving the world’s decarbonization ambitions
and thus is expected to grow significantly over
the next decade.
OCI is uniquely positioned to seize these
opportunities presented by the global transition
to a hydrogen economy. Two of our main
products – ammonia and methanol – have
emerged as the most promising products to
drive the hydrogen economy and enable the
energy transition as the products currently
represent more than 50% of global hydrogen
use today and are excellent hydrogen carriers.
OCI benefits from several strategic advantages
as the only producer with facilities and
extensive distribution and storage capabilities
in the United States, Europe, and MENA, all of
which are located near major inland demand
centers or on major global shipping lanes next
to key bunkering hubs.
Nearly all of our facilities have access to ample
and cost effective solar and wind energy. This
facilitates a shift to renewable production
processes and allows us to play a key role in
supplying major hydrogen-deficit markets such
as Europe, as well as develop an ammonia fuel
supply chain to support Asia’s green transition.
OCI’s European assets, which include an
ammonia import terminal in Rotterdam, are
strategically positioned to play a major role in
fulfilling Europe’s hydrogen import needs as
demand ramps up.
These advantages are particularly effective
in positioning OCI to decarbonize its product
portfolio through a pipeline of opportunities
in partnership with key private sector and
government stakeholders in the hydrogen
transition. This is exemplified through OCI’s
recent announcements of several offtake
agreements in Europe for green hydrogen, as
well as the announced partnerships with two of
the world’s leading ship owners, the Hartman
Group and Eastern Pacific Shipping, and the
leading engine manufacturer, MAN Energy
Solutions.
OCI will drive decarbonization through a 20%
emission reduction target
At our Capital Markets Day, we announced
a new group-wide target to reduce our scope
1 and 2 greenhouse gas intensity by 20% (on
a 2019 baseline), to be achieved by 2030, and
carbon neutrality by 2050.
Our main end markets, agriculture, fuel and
feedstocks, account for approximately 60% of
global GHG emissions. Our purpose is clear:
as a leader in our industries and through our
unique geographic and product mix, we are
committed to cultivating a sustainable world
by developing and providing new opportunities
for carbon-free food, fuel, and industrial
feedstocks.
We are committed to achieving these targets,
and have aligned executive compensation to
include specific ESG metrics and operational
performance. In addition, OCI’s Board of
Directors has established a new committee, the
HSE & Sustainability Committee, to effectively
drive the group’s environmental and social
performance.
It is important to note that we continue to
focus on value creation and maintain a strong
capital discipline as we pursue decarbonization
through new strategic initiatives with an
unlevered IRR threshold of >12-14%.
More than an estimated 45% of our target
is achievable with limited incremental
capital spend.
CEO LETTER
CONTINUED
Business performance
Strategy and value creation
Risk management and compliance Corporate governance Financial statements Other informationSustainability
OCI N.V.
Annual Report 2020
8
INVESTMENT HIGHLIGHTS
Global leader in nitrogen and
methanol with excellent diversication
Highly strategic locations allow for
enhanced netback pricing through a
coordinated global commercial strategy
Favourable position on the cost curve
with state-of-the-art asset base
•
Net Ammonia 15%
•
Urea 34%
•
CAN 10%
•
UAN 16%
•
Methanol 18%
•
Melamine 1%
•
DEF 6%
18%
>40yrs
30-40yrs 20-30yrs 0-10yrs
10-20yrs
8%
13%
9%
52%
•
North America 35%
•
Europe 24%
•
MENA 41%
Youngest asset
base relative
to global peers
with 34% of
production
capacity under
5 years old
16.2 million metric tons per year
of production capacity
Asset base by vintage Capacity by region
Looking ahead to 2021 and beyond
Our priority remains to maximize free cash flow
generation through operational and commercial
excellence, and we remain committed to
our financial policy to deleverage towards 2x
through the cycle.
Following a period of capital-intensive
high growth rates, we are accelerating our
Operational Excellence program as our focus
shifts to extracting more value out of our young
and state-of-the-art asset base. As a result,
we anticipate a healthy increase in our sales
volumes in 2021.
We expect to be one of the main beneficiaries
from improving market fundamentals in our
respective sectors, nitrogen and methanol.
Based on the expected supportive pricing
environment combined with our growth
expectations for production volumes for 2021,
we expect to deliver another year of robust
sales volume growth and cash generation, and
as a result a drop in net leverage to below 3.0x
by year-end 2021.
Finally, we are pleased that we are making
solid progress in our effort to grow our
green portfolio and capitalize on new growth
opportunities in the hydrogen economy.
We made great progress with growing our
biofuel presence, as we strengthened our
market-leading position in renewable methanol
in the UK. We will continue to roll out bio-
methanol as a fuel, which helps reduce the
carbon intensity of road transportation fuels in
a highly efficient way and we also see many
opportunities in other industrial applications
where this versatile product can be used.
OCI is a global leader in the production of
ammonia and methanol, which are the key
products to accelerate the transition to a
hydrogen economy, and is also one of the
largest traders in these products globally.
Combined with our strategic geographic
footprint across four continents, OCI can
simultaneously benefit from growth in the
hydrogen economy and significantly contribute
to the decarbonization of three of the largest
contributors to global greenhouse gas
emissions: food, fuel, and feedstock.
For more details on our sustainability strategy,
please refer to pages 29-76.
Ahmed El-Hoshy
Chief Executive Officer
CEO LETTER
CONTINUED
Business performance
Strategy and value creation
Risk management and compliance Corporate governance Financial statements Other informationSustainability
OCI N.V.
Annual Report 2020
9
Global population
by 2050
Required growth
in food production levels
by 2050
Reduction in arable land
per capita by 2050
Increase in meat
production by 2050
Required reduction in
GHG emissions by 2030
Required increase
in transport biofuel
consumption by 2030
Global long-term fundamentals support expected
sustained growth in our industries
Sources: UN FAOSTAT, World Economic Forum, IEA, IPCC
OUR STRATEGIC PRIORITIES
We have announced our commitment to driving sustainable performance through a differentiated strategy that will
allow us to decarbonize through strong industrial logic
focused on capital discipline and value creation, coupled
with a unique green portfolio that enables the hydrogen economy.
Our strategy is underpinned by
strong governance with long-term incentives tied to ESG and operational excellence metrics and dedicated
attention from our Board of Directors through the HSE & Sustainability Committee.
OPERATIONAL
EXCELLENCE
BUSINESS
OPTIMIZATION
GLOBAL
COMMERCIAL STRATEGY
SUSTAINABILITY MAXIMIZING
FREE CASH FLOW
We are committed to excellence in
every aspect of our organization.
We continuously look for ways to
maximize our production efficiencies,
minimize our emissions and waste,
and maintain our industry leading
health and safety records.
We believe operational excellence
does not stop at the gates of our
plants and we hold all suppliers and
business partners to the standards
set out in our Business Partner
Code of Conduct.
We are committed to optimizing our
global presence and enhance our
position as a global leader in our
industries.
We will continue to explore strategic
opportunities that are in line with
our strategic goals and financial
return expectations, including
acquisitions, partnerships, joint
ventures, business combination
transactions, disposals, spin-offs or
other transactions.
We are committed to implementing
a global approach to our
commercial strategy.
We work diligently to align our
group-wide sales and marketing
activities to optimize our production
mix through our flexible assets
and to maximize the production
of premium products, leverage
logistical advantages through our
global distribution network, and
cultivate customer relationships to
deliver strong netback prices.
We are committed to being an
environmental steward and will
drive the hydrogen economy
and significantly contribute to
the decarbonization of three of
the largest contributors to global
greenhouse gas emissions:
food,
fuel, and feedstock
.
We are committed to our financial
policy aimed at maximizing our
free cash flow generation and
deleveraging.
We believe our diversified product
portfolio, advantageous geographic
presence, and coordinated global
commercial strategy enables us to
maximize netback prices, which
coupled with our ramped-up
production capacity and reduced
capex requirements, will allow us
to achieve strong free cash flow
conversion.
We are building a
sustainable company for
the future with a clear
purpose of cultivating a
sustainable world through
cleaner fuel solutions,
lower carbon feedstocks,
and food security.
Our end-markets cover food, fuel, and feedstock, representing
an opportunity to decarbonize approximately 60% of today’s
global greenhouse gas emissions across agriculture, industry,
and transportation:
• Our nitrogen fertilizers allow farmers to increase crop yields
and improve food quality.
• Our fuel solutions provide clean alternatives to significantly reduce
greenhouse gas emissions by 60% versus conventional fuels.
• Our industrial feedstocks are excellent hydrogen carriers and
decarbonized input for downstream industrial processes.
$75M
Additional EBITDA from
operational excellence expected
in the next 3-5 years
GHG intensity reduction
by 2030
Women in senior
leadership by 2025
Net leverage
through the cycle
OUR STRATEGIC PRIORITIES
OUR
TARGETS
Business performance
Strategy and value creation
Risk management and compliance Corporate governance Financial statements Other informationSustainability
OCI N.V.
Annual Report 2020
10
CAPITALIZING ON THE
HYDROGEN OPPORTUNITY
OCI is building a
sustainable company
for the future that drives
the global transition to a
hydrogen economy.
Accelerated government responses to climate change
are a significant driver of this transition with the EU
Climate Investment plan exceeding €1 trillion over the
next ten years, and the United States re-joining the Paris
Agreement and announcing a $2 trillion Climate Change
investment bill.
Government support and spending plans make one thing
abundantly clear: hydrogen is the fuel and the feedstock
of the future and will also play a vital role in achieving our
global decarbonization ambitions.
Green hydrogen demand is expected to grow ten-fold
over the next decade helping the transition from fossil
fuels to hydrogen as the energy of the future, while costs
of electrolysers and renewable energy are expected to
come down significantly during this time.
Growth in hydrogen demand driven key OCI sectors
1
2020 2030 2040 2050
Existing feedstock uses
Conventional Decarbonized
New feedstock uses
Industry energy
Building heating and power
Transportation
Power generation
EU to invest >€1 tn by 2030
US announces a
$2tn Climate Change Bill
10x green H
2
1
Subject to supportive regulatory environment, subsidies, technology advancements and national environmental targets.
2
Optimal green refers to green ammonia produced using wind/solar energy in the Middle East.
Production cost of hydrogen expected to come down rapidly
0
6
4
2
2020
2030
2040
2050
-25%
-25%
-10%
1
Renewable energy electricity cost declines
2
Electrolyzer capital cost declines
3
Other: efficiency and O&M improvements
Green
Blue
Optimal green
2
$/kg H
2
Business performance
Strategy and value creation
Risk management and compliance Corporate governance Financial statements Other informationSustainability
OCI N.V.
Annual Report 2020
11
CAPITALIZING ON THE
HYDROGEN OPPORTUNITY
CONTINUED
Two of our main products – ammonia and methanol – represent more than 50% of grey hydrogen
use today and are key products to accelerate the transition to a hydrogen economy.
Although most countries are working towards developing a hydrogen economy, it is not feasible
to produce sufficient hydrogen to meet expected demand given limitations on renewable energy
power in many regions, including Europe.
This means that hydrogen will need to be transported over long distances, but as hydrogen needs
to be cooled down to -253 degrees Celsius, this results in a huge loss of scarce green energy
and the cooled hydrogen has a very low energy density. However, ammonia and methanol are the
ideal energy carriers for several reasons:
• Their respective energy densities are higher than hydrogen’s,
• They are widely used products, and
• They are easier to store with extensive global distribution and storage infrastructure in place.
Our end-markets cover food, fuel, and feedstock, representing an opportunity to decarbonize
approximately 60% of today’s global greenhouse gas emissions across agriculture, industry and
transportation.
Our entrepreneurial track record means we have the relationships and global reach to drive
change without having to choose between sustainability and value creation.
OCI opportunities:
ammonia and methanol are the only hydrogen carriers capable of decarbonizing our key sectors
Ammonia and methanol form ~50% of
grey hydrogen use and are key products in
achieving a green hydrogen economy.
Food Feedstock
Fuel
Natural gas
or renewable
H
2
sources
H
2
Global GHG
emissions Blue / Green ammonia Bio / Green methanol
Agriculture
20%
Enabler for low carbon farming
Fuel
10%
No CO
2
, SO
x
, or particulate
emissions upon combustion
Needs less refrigeration (-33°C
NH
3
vs -253°C H
2
)
Effective and easier to handle
than H
2
Cleaner burning low carbon
fuel in marine transport. Widely
used in road transport
Feedstock
or energy
carrier
30%
Green feedstock for chemicals
and low-cost solution to
transport H
2
70% higher energy density
than H
2
Efficient and promising green
feedstock for chemicals in
many end-markets
84% higher energy density
than H
2
Business performance
Strategy and value creation
Risk management and compliance Corporate governance Financial statements Other informationSustainability
OCI N.V.
Annual Report 2020
12
OCI’s unique advantages
We are a global leader in the production of ammonia and
methanol and are one of the largest traders in these products.
We also benefit from several strategic geographic advantages,
including:
• We are the only producer with facilities and extensive
distribution and storage capabilities in the United States,
Europe and the MENA region.
• Our coastal assets are all located on major global shipping
lanes next to key bunkering hubs for the transportation of
renewable fuels.
• Almost all our assets have access to abundant and cost
effective solar and wind energy, meaning we can shift to a
renewable production process. As such, we can play a key
role in supplying major hydrogen-deficit markets such as
Europe and Asia.
• Our European assets, which includes an ammonia import
terminal in Rotterdam, are strategically positioned to play
a major role in fulfilling hydrogen import needs as demand
ramps up.
These advantages are particularly effective in positioning us to
decarbonize our asset base through a pipeline of opportunities,
in partnership with key private sector and government
stakeholders in the hydrogen transition.
OCI’S STRATEGIC FOOTPRINT WILL
CAPTURE THE HYDROGEN POTENTIAL
We are uniquely positioned
to drive the hydrogen
economy through our
geographic presence and
product mix
Nitrogen and methanol assets
with direct access to hydrogen
pipeline infrastructure coupled
with strategic European import
terminal at Rotterdam.
Strategically located on the East
and West of the Suez Canal
allowing exports from MENA to
Europe as green ammonia or as
an energy carrier.
Nitrogen and methanol assets
located inland and on US
Gulf with direct access to key
infrastructure allowing us to
capitalize on abundant wind and
solar power.
Optimal solar/wind resources
Least
Most
OCI production assets
Business performance
Strategy and value creation
Risk management and compliance Corporate governance Financial statements Other informationSustainability
OCI N.V.
Annual Report 2020
13
Shipping currently accounts for approximately 3% of global CO
2
emissions, but is one of the
hardest sectors to decarbonize due to the current economic cost effectiveness of heavy fuel
oil (HFO).
The International Maritime Organization (IMO) has set emissions targets that can only be achieved
through the adoption of low-carbon fuels on new and existing vessels, and the EU is pushing to
include shipping in the emissions trading system (EU ETS) with binding requirements to reduce
CO
2
by more than 40% by 2030.
Of the various alternative low carbon fuels available, ammonia and methanol, OCI’s core products,
are the only practical alternatives for long-distance shipping. Both fuels, even without the
implementation of decarbonization technologies, already have a lower environmental footprint
compared to conventional fuels.
Green ammonia is particularly promising as it can be produced from solar and wind resources
without emitting any carbon. The ammonia engine on the vessels emits zero CO
2
, zero sulphur
oxides (SOx) and the traces of NOx present in the flue gas can be neutralized to water and
dinitrogen by up to 99%. This makes a green ammonia fueled ship a zero-emission ship.
Without carbon priced in, the grey and blue ammonia and methanol pathways are very close
to cost parity compared to HFO. Using blue ammonia in a ship would start the decarbonization
pathway with an improvement potential of more than 50% GHG reduction.
Most importantly, with global infrastructure in place, these products can bridge the transition
from 'grey' to 'green' until the industry has fully scaled up to products based solely on renewable
energy sources.
As such, we have made it a priority to make these established low carbon fuels for shipping via
partnerships with various players in the shipping value chain, such as MAN Energy Solutions,
Eastern Pacific Shipping, Hartmann Group, and others.
The maritime fuel market in HFO is expected to grow to approximately 430 million metric tons by
2050, translating in ammonia and methanol equivalents of 650 - 900 million metric tons while the
current combined global gross ammonia and methanol production is ~290 million metric tons,
indicating a large opportunity for OCI.
A typical Panamax ship consumes 100 thousand metric tons of ammonia or 93 thousand metric
tons of methanol per year, which equates to 13% of EBIC’s ammonia capacity or 9% of OCI
Beaumont’s methanol capacity as fuel, saving approximately 140 thousand metric tons of CO
2
emissions per year.
~70
~150 ~180 ~350
OCI’S PRODUCTS ARE KEY TO
DECARBONIZING THE MARITIME SECTOR
Cost of container ship and bunkering location
in the Middle East from 2030E (€ mn per annum)
2050 outlook for ammonia and methanol as a substitute
for HFO (metric ton) vs negligible current consumption
24
28
27
29
34
36
48
Grey
Methanol
Grey
Ammonia
Blue
Ammonia
Green
Ammonia
Green
Methanol
Green
Hydrogen
Green
Ammonia
Fuel Cell
CO
2
cost required to break even
with HFO, EUR/ton
2020
ammonia
production
2050
HFO ammonia
equivalent
2020
methanol
production
2050
HFO methanol
equivalent
4 – 5x production
and
>35x
merchant ammonia traded
volumes
182
750 - 900
103
650 - 720
6 - 7x
25
0.11 0.24 0.28 0.58
Heavy
fuel oil
ICE
1
Capex
O&M
Fuel
Additional price per jeans, EUR
Captive use
Merchant trade
1
ICE refers to Internal Combustion Engine, fuel price average between
IEA ($850/t and hydrogen council report at USD 630/t)
Business performance
Strategy and value creation
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OCI N.V.
Annual Report 2020
14
OCI’S GLOBAL DISTRIBUTION NETWORK IS
STRATEGICALLY LOCATED AT KEY BUNKERING
HUBS ON MAJOR SHIPPING LANES
OCI is located at or sufficiently near
3 out of the 4 global bunkering hubs
(Rotterdam, Houston, Fujairah, Singapore)
The existing footprint creates strategic
potential for bunkering stations stopovers,
with limited investment for ammonia/
methanol fueled ship engines
OCI will have a unique starting
position across the estimated 40,000
container ship voyages a year
OCI has production
plants located along
the busiest trading
routes in the world
OCIN/OTE Terminal
Rotterdam is next to the
busiest bunker hub in
the world
Production assets
Major bunkering hubs
Container ship capacity
deployed (width relative
to size)
Sorfert is
~1 day from
Gibraltar
EBIC is located next to the Suez
Canal, where 12% of world
seaborne trade goes through
OCI Beaumont Houston
is one of the global
bunkering hubs
Fertil is next to Fujairah,
where one-third of the
world’s sea-traded oil
passes through
Business performance
Strategy and value creation
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OCI N.V.
Annual Report 2020
15
WE HAVE DEVELOPED A STRONG VALUE CREATION
LOGIC TO EVALUATE OUR SUSTAINABILITY PROJECTS
Full focus on deleveraging towards 2.0x net leverage through the cycle
Prioritize projects with positive
NPV / short payback period
• Focusing on decarbonization using existing facilities and
infrastructure.
• Focusing on net savings carbon abatement potential (mostly
including operational efficiencies and selected cost-effective
strategic options) to drive emission reduction at a net saving.
Maintain strong capital discipline
and value creation focus
• We will continue to evaluate opportunities to further optimize
our capital structure, including assessing green financing
opportunities such as linking sustainability metrics to our RCF
and / or future capital markets issuances.
Fit with long term strategy of
creating tactical optionality
• Driving emission reduction while closely monitoring market
developments and creating option value to address future
improvement potential (such as the ability to address Scope
3 emissions).
Net debt Net debt / adj. EBTDA
7.0x
2017
4.4x
2018
5.4x
2019
4.3x
2020
2.0x
Target
<3.0x
2021 Guidance
Business performance
Strategy and value creation
Risk management and compliance Corporate governance Financial statements Other informationSustainability
OCI N.V.
Annual Report 2020
16
CAPITAL ALLOCATION TARGETS
In a very thorough and ongoing process, OCI has identified various decarbonization initiatives
across its platform based on emission potential and financial feasibility. By means of such
analysis OCI has targeted those initiatives that are NPV positive, through being supported by
positive business cases on a standalone basis or by a customer pull willing to pay a premium
for a greener product, and by governments that are willing to support certain evolving green
technologies with incentive schemes or subsidies.
OCI also has identified partnerships that provide low capex and asset light solutions for the
company through intensive and long-term collaboration with strategic partners. We can achieve
a large proportion of our targets and generate positive returns with limited incremental capital
spend. We intend to achieve this by maintaining an IRR threshold of 12 - 14% on an unlevered
basis with continued focus on deleveraging and cost optimization.
Approximately 45% of our GHG reduction commitment is zero to low capex, including
accelerated operational excellence, switch to renewable energy and expansion of low carbon
product portfolio. Accelerating our operational excellence program is expected to yield tangible
shorter-term returns of more than $75 million EBITDA per annum with a payback of 3-5 years
while also lowering our emissions by 5%.
Over the medium to long term, additional options can become cost-effective depending on
incentives such as regulatory frameworks, product premiums, and increased carbon prices. In
these cases, the combined assets of OCI and its strategic partners often drive synergies which,
supported with the right governmental incentives and subsidies, can drive an important first
decarbonization step-stone in a value chain.
We don’t expect significant capital spending on developing opportunities in marine
fuels and if any capital is deployed on sustainability projects, this will be likely from 2024
onwards, unless we see high return opportunities earlier. With our carefully chosen strategy
and project portfolio OCI is very well positioned to drive the energy transition together with
our strategic partners.
Total Capacity (Mtpa)
Prioritizing projects with a short payback period
1,2
Maintaining strong capital discipline
2015 2016 2017 2018 2019 2020 2021e
Production capacity Total Capex
Total Capex Spend (US $m)
OCI projects with low/no CAPEX
(e.g. operational excellence)
OCI projects
Joint venture projects
Emissions impact
, % of total OCI baseline
0.1
100
10
1
Low Mid High
Demand pull and customer willingness to pay
Regulatory support / framework
Expected initiatives
needing subsidies
Expected NPV
positive initiatives
Technical/financial feasibility
1
NPV calcula
ted assuming a 12% floor, an upward sloping CO
2
price in EU, no subsidies
and no pass-through of cost to customers
2
Parameters for sensitives included natural gas, power, carbon prices and potential subsidies
Business performance
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OCI N.V.
Annual Report 2020
17
DELIVERING NEW
CAPACITY RAMP-UP
Volume growth in 2020 and 2021
•
evidenced by healthy volume growth in
2020, we enjoy a substantial reduction in
execution risk and expect to deliver a full
year contribution from our global platform in
2021
• We have a young asset base that, on
average, can achieve better (1) gas-
conversion (2) higher on-stream times, and
(3) need lower maintenance capex versus
older plants
•
efficiency and utilization rates to improve
energy intensity and operating rates
for organic volume growth, as well as
improve reliability and reduce planned and
unplanned downtime
BENEFIT FROM COMPETITIVE
COST POSITIONS
Cash conversion metrics
•
position with access to cheap feedstock
and a young asset base:
globally with sustainably low levels of
capex
cost advantage is increasing
•
optimization plan that we implemented
over the last two years, we expect to have
a substantially lower cash interest in 2021
compared to 2020
WELL POSITIONED FOR
MARKET UPSIDES
Price recovery
•
improved considerably in recent months and
we believe our industries will benefit from
attractive supply-demand fundamentals and
steepening cost curve
•
more than $330 million to group adjusted
EBITDA on an annual basis, all else equal
Strong commercial position
•
platform will continue to capitalize on our
strategic global reach, implement our
disciplined commercial model, and grow
our trading activities to deepen our market
penetration and enhance our netback
pricing globally
CRYSTALIZING OUR
DECARBONIZATION PATHWAY
Growing from grey to green
•
portfolio, including decarbonized ammonia
and methanol
•
projects and opportunities to achieve
our GHG reduction targets by 2030, in
line with the world’s commitments in the
Paris Agreement, while balancing with our
commitment to deleverage
•
For more information on our
sustainability strategy, please refer
to the sustainability section
beginning page 29
DRIVING OUR
STRATEGY FORWARD
With our volume growth delivered in 2020, we are focused on delivering our nancial,
operational, commercial, and decarbonization strategies
Driver of improving
FCF generation
Driver of improving
FCF generation
Signicant upside from
price recovery
Driving decarbonization through
the hydrogen economy
We are well positioned for future deleveraging and improved credit metrics
Business performance
Strategy and value creation
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OCI N.V.
Annual Report 2020
18
HOW WE
CREATE VALUE
As a global producer and distributor of nitrogen and methanol products, we aim to create sustainable value for all stakeholders and
are committed to delivering sustainable solutions to our customers. We take a holistic approach to our business model to optimize all
resources available to us, thereby maximizing our positive financial, social and environmental impacts for a greener future.
INPUT
Financials
People
Operations
IMPACTOUTPUTSUSTAINABLE BUSINESS MODEL
$9.1BN
Assets
$2.7BN
Equity
$3.47BN
Revenue
$870M
Adj. EBITDA
9
production sites
16.2mt
production capacity
1,418
rail tank cars
2
ammonia vessels
11
direct access to
major waterways
2.1mt
storage capacity
63
countries reached
For our communities:
Educational and social programs specifically
tailored to meet each community’s needs
(p 59-65)
For our customers:
Efficient nitrogen products optimizing
agricultural productivity (p 51)
Cleaner fuel solutions that significantly reduce
GHG emissions versus conventional fuels
(p 46)
For our employees:
Top quartile compensation in all of our
locations, with average annual compensation
of $93 thousand per employee
Improving diversity with 20.24% of senior
leadership positions held by women in 2020
OCIs annual Safety Award went to OCI
Nitrogen recognizing their outstanding safety
performance
For our investors:
Competitive returns and a proven track record
of value creation
For the world:
Helping optimize crop yields to feed the world
(p 57-58)
Improving energy efficiency and reducing GHG
intensity through our operational excellence
program and a differentiated decarbonization
strategy that enables the hydrogen transition
(p 11-17, p 39-48)
300TJ
Energy consumed
90.01M m
3
Water consumed
2.26t GHG
Intensity
5.34mt CO
2
e
Recycled
47.35M m
3
Water discharged
0.09 LTIR
0.23 TRIR
3,682
Employees
100%
Compliance training
enrollment
10.51% women at OCI
2.20% turnover rate
Natural gas
Cleaner fuel solutions and
lower carbon feedstocks
Production
Storage
Sustainable agriculture
Providing cleaner fuel solutions and lower
carbon feedstocks for our transportation
and industrial customers
Providing key nutrients for optimized
yields to meet the world’s food
production needs
Wholesale distribution
Retail distribution
Our position in the value chain
Our suppliers: Natural gas is our primary raw material. Each facility is supplied with natural gas by pipeline purchased
through a mix of long-term contracts with national oil and gas companies in MENA, and spot purchases off national
grids in the Netherlands and the USA. The total annual cost of our natural gas procurement depends on the volume
of gas procured and fluctuations in market prices, and totalled $722.4 million in 2020. In addition to natural gas
providers, our supply chain includes (but is not limited to) providers of transportation and logistics services, utilities,
other production materials, maintenance and engineering services, advisory and professional services, facilities
management, contracting, information technology including hardware and software services, and other needs as the
business requires. The number of suppliers fluctuates depending on the projects and business activities but exceed
3,200 suppliers each year.
a b c
a b c
Business performance
Strategy and value creation
Risk management and compliance Corporate governance Financial statements Other informationSustainability
OCI N.V.
Annual Report 2020
19
21 Business performance
26 Management discussion
and analysis
Business
performance
OCI N.V.
Annual Report 2020
20
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BUSINESS PERFORMANCE
Industry leading safety performance
0.12
1.24
0.09
0.35
IFA (2019)
OCI
LTIR Employee TRIR
OCI’s capacity growth 2008 – 2020 (mtpa)
2008 2010 2012 2015 2020
16.2
Strategic
priorities Delivering our strategy Our priorities
Contribution
to SDGs
1
OPERATIONAL
EXCELLENCE
•
Record HSE performance
achieved despite COVID-19 requiring stringent social distancing
rules and reduced staffing per shift. Two HSE audits conducted at OCI Nitrogen and Fertil.
•
Completed major turnarounds of 10 production lines
at OCI Nitrogen, Sorfert, OCI
Beaumont, BioMCN, and Natgasoline following which we achieved high and steady utilization
rates, particularly at OCI Beaumont and BioMCN.
•
Record production at IFCo
achieved for all products and 10% over prior records for ammonia
and urea liquor, and strong production volumes achieved across the group despite the slate of
turnarounds. As a result, own-product sales increased by 23% year-on-year to a record 12.25
million metric tons.
•
Appointed Bart Voet as Global Vice President of Manufacturing
to lead our global
production platform.
•
Production efficiency:
with the completion of our production platform’s growth, our focus will be on
improving our run-rate utilization rates to maximize
volumes and optimize product mix, and on energy
efficiency to improve on costs on emissions where
possible.
•
HSE:
we will continue to build on our HSE
processes, focusing on process and occupational
safety KPIs, as well as environmental emissions
performance and enhanced KPIs.
8.4
7.6
4.0
1.3
Capex program complete
Nitrogen
Methanol
Business performance
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OCI N.V.
Annual Report 2020
21
BUSINESS PERFORMANCE
CONTINUED
Strategic
priorities Delivering our strategy Our priorities
Contribution
to SDGs
2
BUSINESS
OPTIMIZATION
•
Focused on developing our greener fuel solutions offerings
- Supplying ExxonMobil’s UK subsidiary, Esso, with a biofuel alcohol mix
consisting of bio-
methanol and ethanol to be blended with all Esso’s standard Synergy grade petrol sold in the
UK. This enables OCI’s customers to exceed mandated biofuel blending targets set by the UK
and the EU without the introduction of a new fuel standard such as E10.
- Supplying Essar Oil (UK) Ltd with bio-methanol
as part of a biofuel alcohol mix, to be blended
with all Essar's petrol sold in the UK.
- Entered into two partnerships with RWE and Nouryon to purchase green hydrogen
produced
through electrolysers, which will be used to produce green methanol at BioMCN and help
abate the plant’s CO
2
emissions.
- Secured a 7-year supply of renewable gas in the United States
at competitive economics as
part of our strategy to grow our US bio-methanol business.
• Integrated Fertiglobe to achieve significant synergies.
The platform has yielded strong
quantitative and qualitative benefits through:
- a unified culture
with dedicated leadership and corporate functions to strengthen governance
and compliance;
- excellent cooperation across sites to optimize operations
, improve turnaround and capex
planning, and share technical know-how;
- centralized commercial decision-making
resulting in improved premium price achievement
through deeper downstream reach in key export markets to capture more in-land premiums,
significantly reduced reliance on traders, and optimized trade flows to capture freight savings
and maximize netbacks.
•
Continue to grow our green fuels portfolio
as part
of our sustainability strategy, including continuing to
roll out bio-methanol as a fuel, which helps reduce the
carbon intensity of road transportation fuels in a highly
efficient way. We also see many opportunities in other
industrial applications where this versatile product can
be used.
•
Further crystalize Fertiglobe’s value creation
,
particularly on the technical front to optimize production
and energy efficiency.
•
Continue to evaluate strategic opportunities
including select add-on optimization opportunities, and
multiple value enhancing opportunities for the methanol
group as the outlook has strengthened considerably.
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Total sales volumes grew 5% year-on-year
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Annual Report 2020
22
Strategic
priorities Delivering our strategy Our priorities
Contribution
to SDGs
3
GLOBAL
COMMERCIAL
STRATEGY
•
Focused on increasing our downstream market participation
to enhance supply chain value
capture through:
-
More active trading of third-party product, particularly ammonia, to opportunistically capture price
movements.
-
Increased logistics investments including adding a second ammonia vessel, enhancing our
warehousing positioning globally, and capitalizing on our exclusive access to key terminals and
port facilities.
-
Grew our reach through commercial partnerships and supply agreements in key markets, and
integrated the Dyno Nobel volumes into N-7’s portfolio.
-
Grew Fertiglobe’s ability to participate in larger tenders in key import markets such as India and
Ethiopia.
•
Continued to optimize our methanol commercial platform
by strengthening the US and
European teams, and consolidating our bio-fuels business under OMM leadership to provide
further depth and agility to strategic commercial decision-making.
•
Continue to build our global capabilities
through
strategic partnerships, customer partnerships, and
organically growing our team. We will also invest in
logistical positioning through storage terminals and
logistics assets and push further downstream to the
end customer, evaluating supply chain margins versus
costs to determine our optimal commercial approach.
Centralized commercial strategy has environmental advantages
BUSINESS PERFORMANCE
CONTINUED
Our centralized commercial strategy has
contributed to the displacement of over
1 million tons of Chinese urea exports to
Europe, the Americas, and Africa in 2020,
effectively saving approximately 66 thousand
tons of CO
2
e in vessel emissions, a 61%
reduction as compared to 2017.
Sorfert to USA:
~18 days at sea
China to USA:
~35 days
at sea
OCI’s urea
trade flows
OCI’s geographic
end markets
49% reduction
in
CO2
emissions
per shipment
delivered to the USA
from Sorfert instead of China
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11.71
2019 2020
14.68
+25%
Total sales volumes
Business performance
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OCI N.V.
Annual Report 2020
23
BUSINESS PERFORMANCE
CONTINUED
Strategic
priorities Delivering our strategy Our priorities
Contribution
to SDGs
4
SUSTAINABILITY
•
We are driving our sustainability strategy and have announced 2030 and 2050
decarbonization targets
• We believe we are uniquely positioned to reach our greenhouse gas (GHG) reduction targets and
help the world decarbonize in line with the Paris Agreement, with ammonia and methanol being
the most promising products to enable a hydrogen economy. Our strategy follows a gradual path
from grey to green:
-
Efficient grey product production through our Operational Excellence platform: we have a
proven track record in maximizing production efficiencies while minimizing emissions and waste
-
Blue and low carbon products: we have worked to expand our current product offering to
develop cleaner and greener products for downstream uses and fuel solutions, including
methanol, bio-methanol, diesel exhaust fluid (DEF)
-
Going green: we will work toward moving to 100% use of green energy and green feedstocks
through short and long-term opportunities, which we describe in the Sustainability section
beginning page 29.
•
We are capitalizing on our strategic geographic positions in the United States, Europe and
MENA to maximize our access to abundant and cost-effective renewables, and leverage our
infrastructure to develop our green ammonia and methanol products.
•
Focus on pursuing our announced decarbonization
strategy through:
-
Monitoring the achievement of internal decarbonization
KPIs for each asset
-
Continue evaluating pipeline of carbon reduction
projects balancing between capex needs, investment
returns, and decarbonization potential
-
Identify and pursue key new partnerships that would
enable decarbonizing without major capex
-
Focus on growing our green products portfolio to
accelerate our non-project based decarbonization
-
For more information please refer to the Sustainability
section beginning page 29.
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17 ICONS: COLOUR VERSION
ICONS
When an icon is on a square, that square must be propor tional 1 x 1.
The white icon should be contained by its dened colour, or black
background.
Do not alter the colours of the SDG icons.
ICONS
In January 2018, the United Nations launched a revised design of Icon 10, as seen on this page
•
Cleaner fuels and
feedstocks: 22%
•
Other products: 78%
3MT of methanol, bio-methanol,
DEF, and green ammonia sold in 2020
1.7% reduction in
GHG intensity year-on-year
2019 2020
2.30
2.26
Business performance
Strategy and value creation Risk management and compliance Corporate governance Financial statements Other informationSustainability
OCI N.V.
Annual Report 2020
24
Strategic
priorities Delivering our strategy Our priorities
Contribution
to SDGs
5
MAXIMIZING
FREE CASH
FLOWS
•
Demonstrated commitment to financial discipline and deleveraging:
- Refinancing:
completed bond refinancing in October to achieve $23 million in annual interest
savings and 50bps reduction in weighted average cost of debt from 4.98% to 4.48% (down
from 6% at the end of 2018); also completed Fertiglobe refinancing to achieve $9 million annual
interest savings for a total interest savings of more than $32 million.
- $167 million cash consideration received from ADNOC
in relation to the Fertiglobe business
combination.
- Natgasoline successfully completed a $120 million insurance settlement
as compensation for
properly damages and business interruption losses, of which $60 million was received in 2020
and the balance in early 2021.
- Partial IFCo bond redemption of $147 million
in February 2021 to reduce interest cost and debt
subordination further simplifying our capital structure.
- Covenants reset at zero cost with significant headroom
. Leverage and interest cover covenants
for our $850m Revolving Credit Facility amended to provide additional flexibility through 2021.
•
Achieved free cash flows of $305 million in FY 2020
on improved EBITDA, working capital,
and lower financing costs.
•
As a result, deleveraged by $332 million
to end the year with net debt of $3.73 billion
compared to $4.06 billion at 31 December 2019.
•
Remain committed to our financial policy
to
prioritize our free cash flows towards deleveraging with
a net leverage target of 2x through the cycle.
•
Continue to optimize and simplify our capital
structure
through opportunistic financing at both the
parent and subsidiary levels should it achieve further
reduction of our weighted average cost of debt and the
extension of our debt maturity profile.
40
17 ICONS: COLOUR VERSION
ICONS
When an icon is on a square, that square must be propor tional 1 x 1.
The white icon should be contained by its dened colour, or black
background.
Do not alter the colours of the SDG icons.
ICONS
In January 2018, the United Nations launched a revised design of Icon 10, as seen on this page
40
17 ICONS: COLOUR VERSION
ICONS
When an icon is on a square, that square must be propor tional 1 x 1.
The white icon should be contained by its dened colour, or black
background.
Do not alter the colours of the SDG icons.
ICONS
In January 2018, the United Nations launched a revised design of Icon 10, as seen on this page
40
17 ICONS: COLOUR VERSION
ICONS
When an icon is on a square, that square must be propor tional 1 x 1.
The white icon should be contained by its dened colour, or black
background.
Do not alter the colours of the SDG icons.
ICONS
In January 2018, the United Nations launched a revised design of Icon 10, as seen on this page
40
17 ICONS: COLOUR VERSION
ICONS
When an icon is on a square, that square must be propor tional 1 x 1.
The white icon should be contained by its dened colour, or black
background.
Do not alter the colours of the SDG icons.
ICONS
In January 2018, the United Nations launched a revised design of Icon 10, as seen on this page
BUSINESS PERFORMANCE
CONTINUED
2019
2020
2021 2022 2023 2024 2025
2026-2037
Business performance
Strategy and value creation Risk management and compliance Corporate governance Financial statements Other informationSustainability
OCI N.V.
Annual Report 2020
25
MANAGEMENT DISCUSSION
AND ANALYSIS
$ million 2019 2020
Revenue 3,031.7
3,474.1
Adjusted EBITDA 748.4
869.8
Adjusted EBITDA margin 24.7%
25.0%
Adj. net income (loss) attributable to owners
of the Company
(208.4)
(213.4)
Net income (loss) attributable to owners
of the Company
(334.7)
(177.7)
Basic earnings per share (1.598)
(0.847)
Operating profit as reported 105.0
187.0
Depreciation and amortization (544.7)
(592.2)
EBITDA
649.7
779.2
EBITDA margin 21.4%
22.4%
$ million 2020 performance drivers
Revenue
•
Sales volumes:
25% increase in total sales volumes reaching a record 14.7 million metric tons, primarily due to a
23% increase in own product sold as well as a 36% increase in traded volumes sold. This offset weaker prices in
2020 as compared to 2019.
•
Selling prices:
General weakness in average pricing for our products reaching trough cycles levels during 2020,
driven by weak industrial demand due to COVID-19 production limitations, and overall weakness in global nitrogen
fertilizer prices.
Adjusted
EBITDA
1
•
Adjusted EBITDA increased by $121.4 million to $870 million, primarily driven by the revenue growth.
•
EBITDA margin slightly improved resulting from higher utilization rates of our plants and favorable gas prices in the
EU and US, partly offset by the lower average selling prices.
Operating
profit
Operating profit increased by 78.1% or $82 million in 2020 as compared to 2019, primarily as a result of:
•
Gross profit increased by $89.3 million due to a $442.4 million increase in revenue, partially offset by a
$353.1 million increase in cost of good sold
•
Selling, general and administrative expenses were flat year-on-year as a result of a successful cost optimization
program across the group.
Financing
costs
•
Finance income increased by $151.7 million to $212.5 million, driven by a $153.2 million increase in foreign
exchange gains.
•
Finance cost increased by $24.7 million to ($412.4) million. This was primarily due to a $29.1 million increase in
foreign exchange loss, partially offset by a $4.3 million decrease in interest expense on financial liabilities.
•
The foreign exchange gains and losses mainly relate to external financing and to the revaluation of intercompany
balances in foreign currencies.
Net profit
/ (loss)
•
Net loss of $94.1 million in 2020, compared to a loss of $300.2 million in 2019. Primarily driven by a higher
operating profit and favourable impact of net financing costs due to foreign exchange differences.
•
Adjusted Net profit / (loss) attributable to the owners of the Company was a loss of $213.4 million in 2020,
compared to a loss of $208.4 million in 2019.
1
OCI N.V. uses Alternative Performance Measures (APM) to provide a better understanding of the underlying developments of the performance of the
business. The APMs are not defined in IFRS and should be used as supplementary information in conjunction with the most directly comparable IFRS
measures. The definition of the APM and a detailed reconciliation between the APM and the most directly comparable IFRS measure can be found on
pages 197-198 of this report.
•
Methanol US: 11%
•
Methanol Europe: 9%
•
Nitrogen US: 16%
•
Nitrogen Europe: 22%
• Fertiglobe: 42%
Revenue
by segment:
•
Methanol US: 16%
•
Methanol Europe: 2%
•
Nitrogen US: 21%
• Nitrogen Europe: 15%
• Fertiglobe: 51%
Adj. EBITDA
by segment:
Business performance
Strategy and value creation Risk management and compliance Corporate governance Financial statements Other informationSustainability
OCI N.V.
Annual Report 2020
26
MANAGEMENT DISCUSSION
AND ANALYSIS
CONTINUED
Condensed consolidated statement of cash flows
for the years ended 31 December
$ million 2019 2020
Cash and cash equivalents at 1 January 460.7
600.5
Cash flows from operating activities 337.5
617.8
Cash flows from (used in) investing activities (252.6)
(260.2)
Cash flows from (used in) financing activities 55.2
(244.9)
Net cash flows 140.1
112.7
Currency translation adjustments (0.3)
(26.9)
Cash and cash equivalents at 31 December 600.5
686.3
Net debt as at 31 December
$ million 2019 2020
Long-term interest-bearing debt 4,392.7
4,226.9
Short-term interest-bearing debt 269.6
189.7
Gross interest-bearing debt 4,662.3
4,416.6
Cash and cash equivalents (600.5)
(686.3)
Net debt 4,061.8
3,730.3
Outlook
We expect to continue to see healthy volume growth as we optimize
utilization rates across the platform, and in particular benefit from an increased
contribution of the methanol segments.
The outlook for nitrogen markets is positive for 2021, supported by healthy
farm economics and expected strong demand growth in major nitrogen
consuming regions. Methanol markets are similarly showing strong
downstream demand growth as the global economy and industry activity
recover.
Our priority remains to maximize free cash flow generation and we remain
committed to our financial policy to deleverage towards 2x through the
cycle. Based on the current market outlook for selling prices and our growth
expectations for production and sales volumes for 2021, we expect a drop in
net leverage to below 3.0x by year-end 2021. We will also continue to evaluate
our capital structure to identify further cost effective refinancing opportunities.
$ million 2020 performance drivers
Cash
flows from
operating
activities
•
Cash flows from operations primarily reflect the change in net losses in 2020 and 2019, and changes in
working capital.
•
Net loss was $94.1 million in 2020 compared to a net loss of $300.2 million in 2019, an improvement of
$206.1 million.
•
Working capital inflows of $139.6 million compared to outflows of $1.1 million in 2019, a swing of $140.7 million.
Cash
flows from
investing
activities
•
Cash flows used in investing activities were $7.6 million higher than 2019, primarily due to the full year
consolidation of Fertil
•
Total cash capital expenditures were $262.6 million in 2020 compared to $300.0 million in 2019, of which
maintenance capital expenditure was $239.4 million and $169.8 million respectively.
Cash
flows from
financing
activities
•
Proceeds from borrowings in 2020 totaled $2,070.4 million, which consisted of the proceeds of new financing
arrangements and changes in the outstanding amounts of revolving credit facilities.
•
During 2020, we successfully completed the refinancing at both the parent company and Fertiglobe level, which
will generate cash interest savings of more than $32 million per year, as we lowered our weighted average cost of
gross debt by c.60 bps to below 4.5%. As a result of the refinancing activities $51.3 million of cost were incurred
mainly due to the bond redemption fee of $33.3 million.
•
Repayments of borrowings were $2,396.0 million in 2020, mainly related to the above refinancing and
amortization of debt.
•
As part of the final post-completion settlement between the Company and ADNOC, an amount of $166.8 million
in cash was received.
Free cash
flow
1
•
Free cash flow before growth capital expenditure amounted to $304.7 million in 2020 reflecting the reported
EBITDA for the year, working capital inflows, maintenance capital expenditure, and cash interest paid of $279.1
million.
Gross debt
•
Gross interest-bearing debt decreased by $245.7 million due to repayments of $331.5 million, the aforementioned
refinancing, and negative impact of exchange differences on Euro denominated debt.
Cash
& cash
equivalents
•
As a result of a positive free cash flow and cash received for Fertiglobe closing settlement, cash and cash
equivalents increased to $686.3 million.
Net debt
•
Net debt stood at $3,730.3 million as at 31 December 2020, from $4,061.8 million as at 31 December 2019.
1
O
CI N.V. uses Alternative Performance Measures (APM) to provide a better understanding of the underlying developments of the performance of the
business. The APMs are not defined in IFRS and should be used as supplementary information in conjunction with the most directly comparable IFRS
measures. The definition of the APM and a detailed reconciliation between the APM and the most directly comparable IFRS measure can be found on
pages 197-198 of this report.
Business performance
Strategy and value creation Risk management and compliance Corporate governance Financial statements Other informationSustainability
OCI N.V.
Annual Report 2020
27
'000 metric tons 2019 2020 % Δ
Own product
Ammonia 1,907.1
1,656.8
(13%)Urea 3,110.8
4,763.2
53%Calcium Ammonium Nitrate (CAN) 1,140.8
1,371.8
20%Urea Ammonium Nitrate (UAN) 1,489.6
1,749.9
17%Total fertilizer 7,648.3
9,541.7
25%Melamine 135.8
144.6
6%DEF 508.7
636.2
25%Total Nitrogen products 8,292.8
10,322.5
24%Methanol
1
1,628.7
1,926.5
18%Total own product sold 9,921.5
12,249.0
23%Traded third party
Ammonia 160.6
284.3
77% Urea 329.5
910.5
176%UAN 24.1
41.3
71%Methanol 482.6
258.8
(46%)Ammonium Sulphate (AS) 713.6
712.8
(0%)DEF 73.3
227.0
nmTotal traded third party 1,783.7
2,434.7
36%Total own product and
traded third party 11,705.2
14,683.7
25%$ million 2020 market review Market outlook
Nitrogen
•
Nitrogen prices were down significantly in 2020
compared to 2019 reaching trough levels in the
second quarter.
•
Nitrogen markets faced significant headwinds in
2020 on universally lower feedstock costs and
COVID-19 uncertainty exposed nitrogen prices to
weaker sentiment and significant volatility.
•
Ammonia prices in 2020 were particularly
weak, falling to levels last seen in 2003, due
to a slowdown in GDP/industrial activity more
than offsetting one of the best US ammonia fall
application seasons in a decade.
•
Global nitrogen markets reset going into 2021 on tighter
balances given robust demand forecast in all our key
markets on improved farm economics supported by rising
corn prices and higher corn imports from China and a
recovery in industrial consumption.
•
Chinese urea exports are expected to be lower in 2021
compared to 2020 given higher fertilizer demand on strong
domestic crop prices, growing industrial demand and higher
coal prices.
•
Ammonia prices are benefitting from higher feedstock
prices, a recovery in industrial markets, high-cost capacity
shutdowns, and gas supply curtailments in Trinidad leading
to a structural tighter market in 2021.
•
Our nitrates order book in Europe is healthy going into the
second quarter of 2021.
•
Our US DEF sales reached record levels in Q4 2020 which
combined with higher urea sales prices in the US supports
an improving trend in 2021.
Methanol
•
Methanol prices weakened in 2020 to trough levels
as a result of COVID-19 and its adverse impact on
crude oil prices, weaker global industrial demand
and coal prices, Methanol-to-Olefins (MTO)
affordability in China and exports from sanctioned
countries to Asian markets offered at discounted
prices.
•
Rising utilization rates of MTO plants in China on the back of
healthy MTO economics versus naphtha crackers have been
a key driver of a rebound in methanol demand.
•
The outlook for downstream demand has improved, with fuel
consumption picking up, and a return of global industrial and
construction activity.
•
Long-term industry fundamentals remain positive, with
expected new global supply additions of 6% expected to be
needed to meet demand growth of 13% from 2021-24.
Natural
Gas
•
In 2020, natural gas prices in both the United
States and Europe were significantly below
2019 as COVID-19 hit energy demand during
lockdowns and mild weather exacerbated over-
supply in the LNG market.
•
In 2021, global gas prices particularly in Europe and Asia
have increased on colder weather and tight LNG supply.
•
This has driven up marginal costs of production and
supports selling prices for all our products. It also
strengthens Fertiglobe’s significant competitive advantage as
a result of its fixed gas supply agreements.
•
However, forward curves suggest natural gas prices will
revert to low levels for the foreseeable future, and we expect
to continue to be a beneficiary of a competitively priced
blended natural gas cost.
MANAGEMENT DISCUSSION
AND ANALYSIS
CONTINUED
1
Including OCI’s 50% share of Natgasoline volumes
Business performance
Strategy and value creation Risk management and compliance Corporate governance Financial statements Other informationSustainability
OCI N.V.
Annual Report 2020
28
30 ESG at a glance
31 Our approach to
sustainability reporting
37 Our approach to
climate change
39 Sustainability strategy
52 GHG emissions
and energy use
53 Water and waste
60 How we create value
for our communities
66 Our employees
70 Health and Safety
76 Our approach to
sustainability governance
Sustainability
strategy
OCI N.V.
Annual Report 2020
29
OCI 2020 ESG AT A GLANCE
We are committed to environmental, social, and governance (ESG)
principles, with environmental, social and governance matters fully
integrated into our strategic objectives and executive compensation. Our
Board of Directors are collectively responsible for ESG and have mandated
our Executive Directors with direct day-to-day oversight on ESG matters
As a leader in our industries, we are cognizant of our responsibility to
encourage sustainable practices in our policies, operations, supply
chains, and communities. We are committed to our purpose of cultivating
a sustainable world and believe our products are essential to achieving
cleaner transportation, lower carbon industrial processes, and global food
security. We have aligned our strategic priorities to create sustainable value
for all our stakeholders—our customers, our employees, our communities,
and our shareholders—and develop a greener future for the world.
GHG savings when
bio-methanol is used as
fuel vs gasoline
•
Committed to 20% GHG intensity reduction by 2030 and carbon neutrality by 2050
•
Leading player
in sustainable agricultural and fuel solutions
•
Uniquely positioned to enable the energy transition
for transport, feedstock, and
industrial applications
•
Delivering rapidly through operational excellence while leveraging strategic partnerships
for long-term projects
Driving
sustainable
performance
ENVIRONMENTAL
Lower N
2
O emissions
than global average
Seawater intake
in high water
stress regions
Lower NOx emissions
than global average
Female
Executive Directors
•
Fostering an inclusive culture
, where diversity is recognized and valued, and local
talent is developed
•
Committed to 25% female senior leadership by 2025
• Launched a groupwide D&I program to improve recruitment processes, conduct
de-biasing training, provide sponsorship and mentorship of minority employees, and
develop employee networks increased female board representation to 23% in 2020
from 17% in 2019
Diversity &
Inclusion (D&I)
SOCIAL
Female employees in
US & EU segments
Female
Board Members
Female representation
in senior leadership
in 2020
Employees enrolled in our
compliance framework
training program
• Robust governance structure with ESG oversight at the Board level and focus in the
HSE & Sustainability Committee
•
Executive Directors’ compensation tied to a basket of ESG
metrics and operational excellence
• All employees are trained on our compliance policies, Code of Conduct, and D&I Policy
• All suppliers are required to adhere to our Business Partner Code of Conduct
• Other ethics policies include Human Rights Policy, Anti-Bribery and Corruption Policy, Sanctions
Policy, Insider Trading Code, Whistleblower Policy
Robust
governance
and reporting
framework
encourages best
practices across
our value chain
GOVERNANCE
Whistleblowing reports
investigated
Employees covered
by collective bargaining
or unions
Executive Directors
are responsible for
compliance
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
30
Our sustainability reporting is designed to provide transparency on our ESG practices, policies,
and performance, along with an assessment of the material trends, topics, and interactions
influencing our ESG strategy.
How we report on ESG
Our ESG reporting takes the following into account:
Review of the key global and industry trends, challenges, and risks
We conduct a comprehensive review of the key risks, challenges, and megatrends impacting both
the industries in which we operate and the world. These elements inform our strategic objectives,
our risk management strategy, and allow us to identify opportunities to develop our business.
Stakeholder engagement and identification of material topics
We engage with stakeholders on a regular basis both directly and through industry associations
where we work with our peers to sustainably improve global standards in our industries
and engage in dialogue on key global challenges related to our industries. Our stakeholder
interactions provide us with insights into their key topics of interest and areas of concern, which is
incorporated into our identification and monitoring of material topics.
In addition to engaging with stakeholders, we determine material topics and boundaries by
benchmarking against industry peers and considering disclosure requirements and guidelines
issues by various institutions and regulatory bodies.
Implementation of reporting frameworks
Our ESG reporting aims to comply with global best practices and recommendations from the
Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB) and the
Task Force on Climate-Related Financial Disclosures (TCFD). We also strive to report on how our
businesses contribute to the United Nations Sustainable Development Goals (SDGs). Relevant
disclosures are marked throughout this report, and the corresponding index pages begin on
page 199.
Report boundaries
This report covers the fiscal year ended 31 December 2020, focusing on the material topics for
OCI and its subsidiaries as listed in note 34 of our financial statements (unless otherwise noted).
OUR APPROACH TO
SUSTAINABILITY REPORTING
We are committed
to reporting on our
environmental, social,
and governance (ESG)
performance.
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
31
We engage with stakeholders on a regular basis through customer and investor meetings and
calls, industry and investor conferences, customer service, employee meetings, surveys, portals
and hotlines, community outreach programs, and governmental or regulatory interactions.
Our Executive Directors engage with key stakeholders on ESG and sustainability topics, reflecting
our commitment at all levels of the organization.
In addition to our direct stakeholder interactions, we are an active member of several industry
associations where we work with our peers to sustainably improve global standards in our
industries and engage in dialogue on key global challenges related to our industries.
During the year, key topics and questions raised by stakeholders included:
STAKEHOLDER ENGAGEMENT
We strive to maintain good
relations with our stakeholders
and engage regularly to
cooperate on addressing the
key challenges, topics, and
opportunities related to our
industries.
Stakeholders Topics Addressed through
Employees
Compensation and benefits, training
and development, HSE and particularly
COVID-19 safety
Townhalls, internal communication,
employee surveys, training
programs, COVID-19 HSE protocols
Customers
Relationship management, product
information and distribution, supply chain,
general feedback
Customer letters, direct
communication by commercial
leadership team, proactive supply
chain management, product
information and safety sheets
published on our website
Investors
Market trends, operational excellence,
overall business performance, risks related
to COVID-19, ESG
Annual General Meeting, quarterly
conference calls, investor meetings
and conferences
Communities
Community safety and environmental
impact, local socio-economic
development programs, job opportunities
Engagement with community
leaders, non-profits, direct
donations, local recruitment
RT-CH-210a.1
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
32
We define our material topics by assessing the topics raised by our various interactions with
stakeholders, considering both financial and sustainability materiality in line with “double
materiality” considerations as recommended by the EU Non-Financial Reporting Directive and its
supplements. We also consider the global megatrends, challenges, and industry-specific risks that
affect us, peer and industry reports, and recommendations made by global reporting frameworks.
We annually evaluate the impact these material topics have on our global value chain, our
local operations and our stakeholders to report a holistic view of how we strive to sustainably
manage our business. Our assessment criteria also considered the GRI’s materiality principles of
sustainability context, materiality, completeness, and stakeholder inclusiveness, as well as SASB’s
criteria for materiality.
After assessing a significant number of topics of interest, we have identified the below topics as
being most material to our stakeholders and OCI.
Number Material Topic
1 Occupational health and safety
2 Environmental impact and climate
3 Energy efficiency
4 Local economic development
5 Food security
6 Human capital and D&I
7 Ethics and integrity
8
Water stewardship and waste
management
OUR MATERIAL TOPICS
We take a holistic double
materiality approach to identifying
and defining our material topics
Sustainable Materiality
10
9
8
7
6
5
4
3
2
1
0
1 2 3 4 5 6 7 8 9 10
8
4
3
1
2
5
6
7
Financial Materiality
High
High
• Stakeholder
engagement with:
• Global megatrends
• Industry challenges
• Internal risk
management
• Research reports
• Peer reports
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
33
OUR COMMITMENT TO A
SUSTAINABLE WORLD
What we do Quantifying our contribution
Feeding the
world and
providing global
employment
opportunities
•
Our nitrogen fertilizers allow farmers to increase crop yields and improve food quality,
resulting in improved food availability and improved diets.
•
Providing direct and indirect employment opportunities with commitment to
maximize local employment and developing their skills. ~70% of our employees
are employed in MENA, and we consistently rank in the top quartile of annual
compensation across our locations.
•
Good workplace practices as described in our Code of Conduct and other policies
promotes a safe and encouraging workplace, diversity, and equal opportunity.
Producing green
fuel solutions to
drive the energy
transition
•
Our fuel solutions provide clean alternatives to signicantly reduce GHG emissions
by 60% versus conventional fuels.
•
Strong midstream and downstream contribution to decarbonization through
promoting the use of green/blue ammonia and methanol as a hydrogen carrier,
clean fuel, and decarbonized input for downstream industrial processes.
Minimizing
environmental
impact through
nutrient and
product
stewardship
•
Maintain safe, environmentally responsible production sites that aim to protect local
environments and ensure safe communities.
•
Commitment to educate farmers on nutrient stewardship allows them to maximize
yields through optimal fertilizer application. This reduces soil nutrient loss, protects
from deforestation, and minimizes runoff to groundwater.
Continuously
invest in
best-in-class
technologies
and operational
excellence
•
Maintaining state-of-the-art production facilities, coupled with the positive impact of
our sustainable fuels portfolio, allows us to minimize our emissions and consequently
reduce our impact on climate change.
•
Our water management processes implement best available technologies wherever
possible to reduce our water use and maximize reuse and recycling of water in our
production processes to minimize our water discharge and our need for fresh water.
Top quartile
compensation at all
locations
Employees in 2020
Nitrogen fertilizers
sold in 2020
LTIR performance
is 74% better than
peers per IFA
#1
Global bio-methanol
producer
Cleaner fuel solutions
sold in 2020
(methanol, bio-methanol,
DEF, green ammonia)
112K
Our digital resources
reached over 112,000
users in 2020
Lower CAN CO
2
footprint than the
European average
GHG intensity
in 2020
Water consumption
intensity in 2020
Driving decarbonization with a focus on sustainable
value creation and contributing to the UN Sustainable
Development Goals (SDGs)
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
34
Sustainability
Report | Environment
OCI N.V.
Annual Report 2020
35
GLOBAL INDUSTRY MEGATRENDS
Key megatrends Key risks and challenges Key opportunities
Food security
•
Risk of current agricultural systems not producing enough
food by 2050, while minimizing potential of deforestation and
protecting ecosystems.
•
Finite availability of arable land coupled with soil degradation
increases risk of deforestation and biodiversity loss.
•
Global shifts in dietary preferences may result in changes to crop
production and agricultural patterns.
•
As a leading nitrogen fertilizer producer present across the
globe, we are well positioned to promote the efficient use of
nitrogen fertilizers and best practices.
•
This ensures soil health, high yields, re-forestation, and proper
irrigation to minimize water stress, maximize Nutrient Use
Efficiency, and minimize nutrient losses to the environment (air,
groundwater, surface water).
Climate change
•
Impact of changing weather patterns, and extreme weather
events on supply chain and farming seasons.
•
Global push to decarbonize to mitigate climate change.
•
Water stress both as a result of climate change and demand
growth from human and industrial consumption.
•
We are focused on developing our renewable energy use to
reduce our dependence on carbon-emitting fossil fuels in our
production processes.
•
We are growing our renewable and clean energy product
solutions for our non-agricultural products, with a particular
focus on the energy transition.
•
We are developing more efficient nitrogen fertilizers (e.g.: low-
carbon variants) and promoting nutrient stewardship.
Circular economy
and changing farming
practices
•
Changing farmer economics and farmer proles, such as:
aging farmers, changing technology pushing for digitization in
agriculture, and a growing focus on resource scarcity.
•
Sustainability drive to recycle/reduce nutrient loss and reuse
existing nutrients reduces demand for conventional fertilizers,
and improves food value chain integration.
•
Adapting farm economics to be more sustainable by
developing low-carbon fertilizers, digital solutions, and micro-
financing opportunities. We are participating in projects that
support farmer education, and provide several digital tools.
•
We are integrating circular economy concepts in our
manufacturing processes.
We monitor the global megatrends affecting
our industries and our stakeholders
These megatrends and their associated risks, challenges and opportunities inform our strategy, better serve our
customers, and develop the tools, products, and services that promote sustainable farm and fuel practices to
holistically improve our global environmental and social impact.
Key Global Decarbonization
Challenges...
… Have Common Solutions….
Ammonia and methanol as hydrogen
carriers, green fuels, and green
decarbonization feedstock
… That are Growth
Opportunities for OCI
Uniquely positioned to enable the energy
transition through our geographic presence
and product mix
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
36
OUR APPROACH TO CLIMATE CHANGE -
RISKS AND OPPORTUNITIES
Climate change presents physical and
transitional risks for our businesses,
industries, supply chains, customers,
and communities.
Our Enterprise Risk Management (ERM) framework equips us with the policies and procedures to facilitate the evaluation
and management of risks across our organization. We assess and monitor the physical and transitional risks presented
by climate change as one of our primary risks, and believe we have adequate mitigation and sustainability strategies
to maximize the opportunities to develop our business and help combat climate change. We also consider SASB
Chemicals Sustainability Accounting Standards along with TCFD recommendations when assessing our climate-related
risks. Please refer to pages 77-88 for a detailed explanation of our ERM framework, executive and board responsibilities,
and descriptions of our other primary risks and mitigation strategies.
TCFD Strategy (a) (b)
TCFD Risk Management (a) (b)
RT-CH-530a.1
Physical risks
caused by rising global temperatures include extreme weather events
(hurricanes, oods), changing weather patterns, increased water stress, and rising sea
levels. These events and changes can impact our supply chain, disrupt planting cycles and
growing conditions, and impede farmers’ ability to apply crop nutrients.
Transitional risks
associated with transitioning to a lower-carbon economy are primarily
related to (i) changes in carbon-linked regulations and policies, such as the ETS system,
the proposed European carbon border adjustment mechanism, and other potential carbon
taxation mechanisms, (ii) costs associated with transitioning to lower emissions technology
and resource efciency, and (iii) dietary shifts to more plant-based nutrition.
Potential impact
•
Rising insurance costs and lower pay-outs
•
Unplanned downtime
•
Interruption to supply chain, such as power outages caused by hurricanes
•
Changing weather patterns impacting availability of water and reducing predictability
of planting seasons
•
Commodity price volatility
Potential impact
•
Higher capital expenditures to transition to lower emissions technologies
•
Higher or new taxation measures on carbon-related products
•
Changes to crop demand to accommodate dietary shifts to more plant-based nutrition
PHYSICAL RISKS
•
Decarbonization pathway:
we are pursuing a decarbonization strategy with long-term
targets, as described on pages 39-40.
•
Green products:
we are growing our sustainable fuel and feedstock solutions portfolio to
accelerate our path to decarbonization, as described on pages 46-51.
•
Water efficiency:
we are focused on continuously improving our water efciency, particularly in water stressed regions where we primarily use seawater, as described on
pages 53-56.
•
Low carbon nutrients:
our low-carbon nitrates and de-carbonizing efforts for our nitrogen
fertilizers help reduce farming emissions, and our nitrogen fertilizer product offering is key
maximize soil health and feeding the crops that are the favoured by global dietary shifts,
described on pages 51 and 57.
•
Digital solutions:
our digital applications help farmers monitor weather patterns to optimize their activity planning and calculate optimal nutrition application, as described on
page 58.
Water
stress
Changing
weather patterns
Rising global
temperatures
Rising sea
levels
Extreme
weather events
Regulatory
changes
Cost to transition to lower
emissions technology Dietary shifts
TRANSITIONAL RISKS
OCI’s resilience: mitigants and opportunities
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
37
OUR APPROACH TO CLIMATE CHANGE
As a producer of nitrogen-based products, we generate greenhouse gases along our value chain.
However, our products are essential to meet the global challenges of food security, decarbonized
industrial processes, and cleaner fuel solutions by playing a key role to achieving climate neutral
food, fuel, and feedstock for production processes.
Our nitrogen fertilizers are essential to achieving the crop yields necessary to meet global food
demand. We believe that ammonia and methanol are the most promising products to enable the
energy transition, with their application as shipping fuels being particularly promising as these
products can help this sector decarbonize in a cost-effective way. Other products in our portfolio
such as methanol, bio-methanol, and DEF are important contributors to the development of
cleaner fuels.
Accordingly, through their respective cycles, our end products all contribute positively to the fight
against climate change by aiding the sequestration of carbon in farming, land reclamation, and the
elimination of transport emissions.
With production facilities in five countries around the world, our operations are subject to different
environmental regulations, but we are unequivocal in our goal to reduce our environmental impact
wherever possible. This has been our policy since we first entered the nitrogen space in 2008.
We have invested heavily in achieving this by both minimizing our environmental footprint through
continuous investment in state-of-the-art technologies to maintain one of the world’s youngest
and most efficient asset fleets, and maximizing our development of greener products, including
our cleaner fuel solutions portfolio.
We have announced environmental targets to reduce our scope 1 and 2 greenhouse gas
emissions intensity by 20% by 2030, which highlights our commitment to reduce our climate
impact throughout our value chain such as further improving our production processes and
feedstock sources, farmer education, supply chain efficiencies, and product innovations.
We aim to achieve our targets through a comprehensive climate strategy that includes investing
in cleaner technologies and projects, recycling and reusing resources, and cooperating with
all our stakeholders, industry peers, governments, and other institutions in the fight against
climate change.
We are committed to being an
environmental steward and have
aligned our strategy to the world’s
goal of combating climate change,
as established through the 2015
Paris Climate Agreement.
TCFD Strategy (a) (b)
TCFD Metrics & Targets (a) (c)
-30% Industry
-10% Transport
-20% Agriculture
-20% Power
-10% Waste
1.5
o
C pathway
2
o
C pathway
Continued growth
‘business-as-usual’
Global CO
2
emissions, Gt CO
2
/ year
2010 2020
2030 2040 2050
20
40
60
80
OCI focus markets
OCI’s focus markets account for
~60% of emission reduction potential
OCI indirect markets
OCI also indirectly influences ~30% of
further emission reduction potential
Governments have set targets for the 1.5-2°C pathway
• EU Green Deal to cut emissions by 55% in 2030 and
reach net zero by 2050
• US recommitted to Paris agreement targeting net
zero by 2050 and shaping green deal
To limit global warming, the world needs to rapidly
reduce annual emissions. OCI’s focus markets need
to contribute to these emission reductions
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
38
SUSTAINABILITY STRATEGY
Quantifying our GHG emissions baseline
During the year, we engaged an external climate change and sustainability consultant
to quantify the group’s Scope 3 greenhouse gas emissions and abatement initiatives for
Scope 1, 2 and 3. Our 2019 total emissions were quantified as follows in accordance with
the Greenhouse Gas Protocol:
We have set a groupwide target to reduce our Scope 1 and 2 greenhouse gas (GHG) emissions
by
20% by 2030
and aim to achieve carbon neutrality by 2050
. We have set our environmental targets as a significant step towards aligning to the 2°C pathway. We are exploring joining the
Science Based Target Initiative (SBTi) in the next few years and anticipate moving to a science-
based target in the future.
2019 was chosen as the base year in line with the Science Based Target Initiative’s (SBTi)
recommendations, and as it was the first year following completion of our expansion program. It
was restated to include a full year of emissions from Fertil and 50% of Natgasoline. Base year GHG
emissions will be recalculated with any significant change in business operations (for example,
acquisitions or divestments, or a change in product portfolio), corrections to historical data based
on availability of more accurate information, or changes to reporting methodology.
How we calculate GHG intensity:
• Emissions boundaries:
Gross Scope 1 and 2 greenhouse gas emissions, stated in carbon
dioxide equivalent terms, calculated using the EU ETS methodology. This means that the CO
2
used in the production of urea and other downstream processes, which is defined as Scope 3
as per the GHG Protocol and part of scope 3 in the table above, is included. By including the
CO
2
that goes into downstream processes, we eliminate the fluctuations that may occur when
we make any changes or experience downtime in our downstream product mix and present a
transparent view of the CO
2
produced when making ammonia. This also better aligns us to the
SBTi’s methodology.
• Production boundaries:
Gross ammonia production on a nutrient-ton basis, and our total
methanol production on a product ton basis. We believe this most accurate reflects the nitrogen
content of our production portfolio, eliminates the possibility of double counting downstream
products and normalizes for annual fluctuations in our product mix.
TCFD Metrics & Targets (a) (c)
Scope Category CO
2
e (Mn metric tons) %
1 Production 9.2 24
2 Purchased electricity 0.6 2
3 Purchased fuel, raw materials, other 4.2 11
Transport (upstream and downstream) 0.5 1
Product use
23.3 62
Total 37.8 100
•
Product use
•
Production
•
Purchased electricity
•
Purchased fuel, raw materials, other
• Transport (upstream and downstream)
Setting long-term environmental targets
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
39
SUSTAINABILITY STRATEGY
CONTINUED
We have spent considerable time developing a roadmap to achieve these targets, consisting of both short-to-medium
term and long-term value-enhancing initiatives offering sustained environmental and operational benefits.
Our operational excellence program is expected to deliver approximately 5-7.5% of our target through a strong focus on
energy efficiency and asset reliability, which will be achieved through short-to-medium term quick wins at no or low capital
expenditure requirements while simultaneously generating more than $75 million of annual incremental EBITDA. This is
further described on pages 43-44.
We believe we can deliver approximately 12.5-15% of our target through new strategic, lower carbon initiatives that follow
the transition pathway of grey to blue to green, capitalizing on both new and established technologies such as waste
gasification, CCS, purchased blue and green hydrogen, and switching our facilities to renewable energy sources (RES),
which will contribute approximately 4% of our target at no or low economic cost.
TCFD Strategy (a) (b)
TCFD Risk Management (a) (b)
TCFD Metrics & Targets (a) (c)
RT-CH-110a.2
Driving decarbonization through
value enhancing operational and
environmental initiatives
• CCS/U
• Purchased blue
hydrogen
Transition pathway
• Biofuels
• Green hydrogen,
ammonia, and
methanol from
RES
2
• Waste gasification
• Bio-methanol
• RES to substitute
current power
(Scope 2)
Blue Green Other solutions
2019 GHG intensity baseline Operational excellence Lower carbon initiatives 2030 GHG intensity target 2050 carbon neutrality
1
Consolidated scope 1+2 calculated on EU ETS methodology on total ammonia and methanol production on a nutrient ton basis. Ability to achieve these targets is subject to supportive regulatory
environment, subsidies, technology advancements, and national environmental targets. Base year GHG emissions will be recalculated with any significant change in business operations (for
example, acquisitions or divestments, or a change in product portfolio), corrections to historical data based on availability of more accurate information, or changes to reporting methodology.
2.30
1.84
-20%
5-7.5% emission reduction
through operational excellence
• ~5% expected at
no/low costs
in the short-to-medium term,
~$75 million p.a. EBITDA
to be delivered over 3 - 5 years
• ~0-2.5% with capital in the medium-to-long
term with focus on economic payback
1
Accelerated focus on
reliability, capital
performance and energy efficiency
12.5-15% emission reduction through
new strategic, lower carbon initiatives
Ongoing activities in lower carbon
products and switch to RES at
low/no economic cost
account
for ~4% emission reduction
Partnerships and lower carbon
technologies
ensure optimal
value creation
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
40
GHG EMISSIONS – OUR APPROACH
TO ACHIEVING OUR TARGETS
While there is no single or straightforward solution to reducing GHG emissions in our value chain,
we have identified several short, medium, and long-term opportunities to transition from fossil fuels
to a low-to-no carbon mix, which will help meet the ambitious targets set by the Paris Agreement.
We believe we are uniquely positioned both in terms of our product mix and global geographic
presence to enable the energy transition and the decarbonization of
food, fuel, and feedstock
, with ammonia and methanol emerging as the most promising products to achieve this.
While we are fully committed to pursuing our reduction strategy, we cannot do this alone, and
are dependent on the timing, scale and area of focus of regulatory and fiscal support, such as
US environmental policies, the EU carbon border tax mechanism, and governmental support and
subsidies for green initiatives.
TCFD Strategy (a) (b)
TCFD Risk Management (a) (b)
RT-CH-110a.2
Our strategy to achieve our long-term
GHG reduction targets is multi-disciplinary
and multi-pronged, ensuring that all
aspects of our business are fully aligned
to achieve these targets.
Ammonia and methanol have a pivotal
role in these sustainability transitions
Food
Agriculture,
including crop
production,
accounts for
~20% of global
GHG emissions
Fuel
Continuously
growing transport
sector emits
~10% of global
GHG emissions
Feedstock
Industry emits
~30% of global
GHG emissions,
of which 90% are
CO
2
emissions
Sustainability transitions are required
to decarbonize the global economy
Fuel
Feedstock or
energy carrier
Blue/
Green
ammonia
Of the future potential fuels,
blue or green ammonia
is one of the few fuels to
address all emissions.
Blue or green ammonia is
a lower cost alternative to
transport hydrogen.
Bio/
Green
methanol
Bio or green methanol is
the only low carbon fuel
that can be used effectively
in road transport with an
84% higher density than
hydrogen.
Bio or green methanol is
considered an efficient
and promising green
hydrogen carrier with a
70% higher density than
hydrogen.
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
41
GHG EMISSIONS – OUR APPROACH TO
ACHIEVING OUR TARGETS
CONTINUED
TCFD Strategy (a) (b)
SCOPE
1
SCOPE
2
SCOPE
3
Decarbonizing production processes through:
• Blue Hydrogen (CCUS)
• Circular Hydrogen (Waste-to-Syngas)
• Green Hydrogen (Renewable Electrolysis)
• Biobased Feedstock (2nd & 3rd generation)
And maximizing our energy efficiency to
reduce our emissions
Decarbonizing our utilities through:
• Renewable Energy Power Purchasing
Agreements
Minimizing our upstream
emissions through:
• Working with our supply
chain partners to decarbonize
the transport of raw materials
to our assets
Decarbonizing Our Value Chain
OCI’s upstream and onsite decarbonization
Sustainable farming Green chemicals
Green fuels
Decarbonized production
processes leads to:
• Low carbon nitrogen
fertilizers
• Organic nitrogen fertilizers
when using green, circular
and biobased Hydrogen,
Nitrogen and CO
2
as
feedstock
Decarbonized production
processes leads to:
• Low carbon and zero
carbon industrial chemicals
allowing customers to
decarbonize a wide range
of products in the chemical
value chain
• Green/Bio-methanol
and ammonia for
industrial use
Decarbonized production
processes leads to:
• Low and no carbon green
fuels which help our
downstream value chain
minimize emissions
Minimizing downstream
emissions through:
• Supporting farmer education
programs (e.g.: 4Rs)
• More effective fertilizers (OCI’s
Nutramon, green ammonia,
Exacote)
• Inhibitors and slow release
fertilizers
Minimizing downstream
emissions through:
• Recycling finished products
at end-of-life in a waste-to-
syngas process to be used as
a perpetual feedstock in OCI’s
plants and contributes to the
circular economy
Minimizing downstream
emissions through:
• Green Ammonia as the
fuel of the future
• DEF to abate NOx
emissions from diesel
• Green/Bio-Methanol for
various transportation
modes
-20% GHG intensity reduction by 2030
Downstream decarbonization
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
42
GHG EMISSIONS – OUR APPROACH TO
ACHIEVING OUR TARGETS
CONTINUED
The program is founded on three key pillars that are tightly interlinked: Process Safety, Reliability and
Energy Efficiency. The program is expected to yield significant reductions in GHG intensity and contribute
approximately $75 million per year in incremental EBITDA over the next three to five years.
Maximising production
efficiencies while minimizing
emissions and waste
The Global Operational Excellence Program
is already set in motion and is being rolled
out across all our sites.
Process safety enables reliability, which in turn enables energy efficiency to achieve lower GHG emissions
Process safety Reliability
•
Leading process safety design elements
featured
by OCI’s young asset base
•
Site led improvement programs
reflecting the site-
specific process safety priorities
•
Groupwide leading performance KPI’s
and best
practices for Process Safety Fundamentals
•
Site-led improvement programs
reflecting site-
specific priorities and the “Focus & Follow Through”
approach
•
Global reliability program
focused on the
identification and elimination of repeat issues
•
Structured readiness reviews
for major turnarounds
to improve completion times, competitiveness and
predictability
Energy efficiency
•
Energy-efficient designs
featured by OCI’s young asset base
•
Immediate focus on operational excellence
,
supported by industry leading monitoring tools
•
Reviewing our energy and feedstock purchases
with the aim to increase our use of green or renewable
sources, including increasing our purchase of renewable
power (such as solar and wind energy) and increasing
our consumption of bio-fuels and alternative green
feedstocks
•
Identify and pursue further efficiency through
select value accretive investments
>40 years 10-20 years 0-10 years
30-40 years
20-30 years52%
9%
13%
8%
18%
Youngest asset base relative to global peers with approximately
34% of OCI production capacity under 5 years old
Contribution to SDGs
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
43
GHG EMISSIONS – OUR APPROACH TO
ACHIEVING OUR TARGETS
CONTINUED
We are committed to excellence in every aspect of our organization. We continuously look for
ways to maximize our production efficiencies, minimize our emissions and waste, and maintain
our industry leading health and safety records. Operational excellence is integral to optimizing
energy efficiency, which in turn is necessary to minimizing our scope 1 GHG emissions as the bulk
of our scope 1 GHG emissions are emitted when we consume natural gas to produce ammonia
and methanol. Our assets hold global certifications recognizing the quality of our environmental
management processes, such as ISO 14001 Environmental Management System, ISO 50001
Energy Management System, and RC 14001 Responsible Care Management System, on which
employees are also trained. Other certifications include REACH, International Sustainability and
Carbon Certification (ISCC), and Fertilizers Europe Product Stewardship. We are compliant with
the applicable environmental regulations at each of our locations.
N
2
O and NOx abatement
Nitrous oxide (N
2
O) is 298 times more potent than carbon dioxide (CO
2
) as a greenhouse gas
and is primarily produced by our nitric acid plants. We have invested heavily in our nitric acid
plants to bring our nitrogen oxide (NOx) and N
2
O emissions down to nearly zero by installing best
available abatement technology such as de-NOx or selective catalytic reduction units and catalyst
replacements through our responsible catalyst management processes.
As a result of these investments, our global N
2
O emissions are 90% lower than the global average
for nitric acids plants, and our overall NOx emissions are 51% lower than the global average for
nitric acid plants. We continue to evaluate ways to achieve further reductions of our NOx and N
2
O
emissions.
Continuous reliability and process improvements
We continuously assess and make improvements to our plant processes, turnarounds and
maintenance stops. This both helps maximize asset reliability and reduce planned and unplanned
downtime, which can result in higher GHG emissions than normal during plant start-ups.
Best Available Control Technology
All of our facilities in the United States implement Best Available Control Technology (BACT),
a pollution control standard mandated by the United States Clean Air Act, to minimize our
environmental impact.
Waste heat capture and recovery
The waste heat and steam systems in all our plants are highly integrated and we endeavor to use
all heat within our processes to make use of energy in the most efficient way possible.
Renewable energy
The primary feedstock at all our production facilities is natural gas, which represents approximately
95% of our total energy use, and is predominantly used to produce ammonia and methanol. We
are reviewing our energy and feedstock purchases with the aim to increase our use of green or
renewable sources, including increasing our purchase of renewable power (such as solar and wind
energy) and increasing our consumption of bio-fuels and alternative green feedstocks. We believe
we are well positioned to capitalize on global low and no-carbon hydrogen opportunities given
our unique geographic positioning, which we believe will allow us to significantly decarbonize our
production processes in the future.
CO
2
capture, recycling, and sale
Our production facilities emit greenhouse gases directly from the conversion of natural gas into our
products, and indirectly through the generation of purchased electricity and steam. We diligently
work to minimize our CO
2
emissions by investing in reduction technologies, recycling CO
2
within
our downstream processes, and selling CO
2
to third parties. We are also exploring carbon capture
and storage (CCS) opportunities as described on page 45.
In 2020 we:
Operational excellence
Sold 0.34 million tons of
CO
2
to other industrial users
Captured 4.8 million tons of CO
2
by
using it in our production processes
Purchased 0.18 million tons of
CO
2
to produce methanol
Maximising production
efficiencies while minimizing
emissions and waste
Contribution to SDGs
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
44
GHG EMISSIONS – OUR APPROACH TO
ACHIEVING OUR TARGETS
CONTINUED
Decarbonizing
through low-carbon
product innovation
Strategic partnerships with industry leaders
on announced projects in Europe, and lower
carbon projects being developed across our
global asset base
We have numerous initiatives underway to capture the transitional potential by partnership with
industry leaders. We have partnered with Nouryon and RWE on three projects
1
that allow us to
offtake green hydrogen at competitive prices with minimal project development costs to OCI:
• We have agreed to
off-take green hydrogen
produced through a 20MW electrolyser from
Nouryon, abating BioMCN’s CO
2
emissions by up to 27ktpa. The project can be scaled up to
60MW in the future.
• We have agreed to
off-take green hydrogen
produced through a 50MW electrolyser with
direct connection to RWE's Westereems wind farm, abating BioMCN’s CO
2
emissions by up to
18ktpa.
• We have agreed to be the main-offtake partner for RWE’s FUREC project, a large-scale waste-
to-hydrogen project that will use proven and commercially available technology to
convert
waste streams to circular green hydrogen
. OCI Nitrogen will use this green hydrogen
to replace some of its natural gas needs to produce ammonia. Accordingly, the project both
reduces the carbon dioxide that would have been emitted from waste incineration as well as
through our natural gas-based ammonia production. Once operational, FUREC will save more
than 200 million cubic meters of natural gas every year, with is equivalent to about 20% of
OCI Nitrogen’s total natural gas consumption and would abate a total of approximately 380
thousand tons of CO
2
in its boarder value chain, of which approximately 160 thousand tons
would be at OCI Nitrogen.
In addition to these projects, we are evaluating carbon capture and storage opportunities for our
assets in the Netherlands, the US and MENA. The blue hydrogen pathway is a cost-effective
decarbonization opportunity, pending carbon prices and subsidies. In the Netherlands, CO
2
emissions from the ammonia production process to be captured and stored under the North Sea
and represents approximately 485 thousand tons of CO
2
abatement potential at OCI Nitrogen.
As CCS technology and projects develop, we expect it to become a cost-effective blue hydrogen
pathway to decarbonize our ammonia and methanol production.
While we are fully committed to pursuing decarbonization opportunities, we cannot do this alone,
and are dependent on the timing, scale and area of focus of regulatory and fiscal support, such as
US environmental policies, the EU carbon border tax mechanism, and governmental support and
subsidies for green initiatives.
1
Subject to supportive subsidies and definitive documentation
Contribution to SDGs
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
45
We are committed to developing products and initiatives to
provide cleaner and more sustainable solutions to our customers.
We aim to grow the share of low carbon products in our portfolio,
which include bio-methanol, green ammonia, and diesel
exhaust fluid.
Bio-methanol
We are a
leading bio-methanol producer
, using biogas rather than natural gas at our Dutch and US methanol plants.
Bio-methanol is an advanced second-generation biofuel that is
produced using bio-waste, meaning it not only reduces our own
consumption of natural gas, but also provides an outlet for waste
that would otherwise emit methane, which represents 16% of
global GHG emissions and traps ~36 times more heat in the
atmosphere than CO
2
over 100 years.
When used as a fuel, bio-methanol provides a 60% reduction in
greenhouse gas emissions versus petrol or diesel, which means
it is an excellent clean alternative fuel to meet renewable fuel
standards.
Bio-methanol is a fast-growing product with our sales volumes
increasing at a 75% CAGR since 2018. However, we believe
this remains an underpenetrated market that will grow rapidly
over the medium term, particularly if regulations such as the EU
Renewable Energy Directive, the UK Renewable Transport Fuel
Obligation, and the US Renewable Fuel Standards continue to
require vehicles to shift away from conventional fossil fuels. We
estimate that EU regulations will require a 17% annual increase in
advanced bio-fuels by 2030.
As an industry leader in biogas procurement, we are very
well positioned to meet this demand as the market grows
and are able to continue making an incremental margin over
the production and sale of grey methanol. We also see many
opportunities in new applications where this versatile product can
be used as an environmentally friendly building block for products
such as cosmetics, building materials, paints and many other
downstream applications.
We have entered into several recent bioproduct supply
agreements with Essar Oil, ExxonMobil, strengthening our
market-leading position in renewable methanol, and we will
continue to roll out bio-methanol as a fuel and industrial
feedstock.
Diesel Exhaust Fluid (DEF)
We are seeing similar regulatory-driven growth for another of
our premium-priced products – DEF, often our highest margin
product out of IFCo. DEF is a urea-based solution that is added
to Selective Catalytic Reduction (SCR) engines to eliminate
NOx and particulate emissions created in diesel exhaust, with
the added advantage of improving vehicle fuel economy by
approximately 5% and using diesel fuel more efficiently.
We are one of the largest producers and distributors of DEF
in the US, with IFCo capable of producing a million tons, and
our US distribution arm, N-7, also marketing DEF produced by
Dakota Gasification and Dyno Nobel.
Regulations in the US, EU and China are driving demand growth
by requiring the replacement of older vehicles, particularly heavy-
duty trucks, coupled with higher dosing rates in newer generation
diesel engines. We see this as being the only viable option for
emissions abatement for truck and rail in the foreseeable future
as the switch to electric vehicles has proven to be unsuccessful
to date for heavy duty trucks or farm vehicles due to poor
power-to-weight ratios. We have grown this business by 34%
over the past year despite the transport sector hit by COVID to
reach record volumes and are well positioned to leverage further
demand growth.
Green ammonia
If global ammonia production switches to green feedstocks,
green ammonia could reduce global GHG emissions by more
than 1%, and would provide significant further decarbonization
opportunities for multiple industries. Green ammonia has multiple
carbon-free uses, including as fertilizer, fuel, chemical feedstock
or source of energy storage.
In 2019, our Dutch fertilizer complex, OCI Nitrogen, became
the first ammonia producer in Europe to add ISCC+ certified
green ammonia produced from bio-methane to its portfolio. The
GHG footprint is at least 50% lower compared to grey ammonia
and can be decarbonized further depending on customer
requirements.
There is a strong potential to ramp up decarbonization volumes
as customers are expected to create a demand pull for such low
carbon premium products. We supply AnQore, a longstanding
strategic customer and one of our neighbours on the Dutch
Chemelot site, with green ammonia through with AnQore
produces acrylonitrile. We are growing our green ammonia
presence as we develop relationships with additional industrial
customers seeking to decarbonize their production processes.
GHG EMISSIONS – OUR APPROACH TO
ACHIEVING OUR TARGETS
CONTINUED
Decarbonizing
through low-carbon
product innovation
Product innovation
Our fuel products
• Bio-Methanol
• Bio-MTBE (tolling)
arrangements
• Bio-Methanol /
Ethanol Mix
Our fuel products have 4 key
advantages
1
bio-fuels
2
3 Provide an outlet for biowaste to
reduce methane emissions from
waste sources
4
GHG emissions
Cars Tankers Biodiesel
Key transport markets
Contribution to SDGs
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
46
OCI FULFILLS CUSTOMER DEMANDS TO
REDUCE EMISSIONS IN THE VALUE CHAIN
Example industries and end markets
Fertilizers Textiles
Animal
Nutrition
Automotive
Cosmetics Electronics
OCI growth opportunities
Sustainability push is a major catalyst for
demand for OCI’s decarbonized products
• Zero carbon ammonia and methanol as
industrial feedstocks
• Zero carbon ammonia and methanol as
shipping fuel
• Biofuels
• Low-carbon ammonia for use in consumer
products
• Zero carbon ammonia feedstocks for fertilizer
• Controlled-release and stabilized fertilizers
(inhibitors)
• Variable rate fertilizers
We increasingly see that markets realize the importance
of Scope 3 emissions. In many cases, to significantly
reduce embedded emissions in an end product, it is key
that decarbonization starts at the beginning of a value
chain, and then is carried onward throughout the chain.
OCI crucially sits at the beginning of a variety of value
chains, and we are seeing a strong push from the
broader market and our customers to decarbonize,
which gives us the opportunity to intensify collaborations
across the value chain.
By smartly sourcing non-fossil raw materials, or by
introducing renewable sources in our production
processes for ammonia and methanol, we can make
a material impact on the carbon footprint of our
customers. For instance, one of our longstanding
customers, Wacker in Germany, uses our bio-
methanol to produce fossil free silicones, which further
decarbonize a variety of products.
In addition, with specific additives or bio-based coatings,
we can also reduce the environmental impact during the
use of fertilizers on farmland by our end customers. To
that end, we can both decarbonize our own assets and
products, and help our customers abate their emissions
while using our products.
This will potentially reap significant multiple value chain
emission reductions in the future. As such we are
excited to increasingly expand and grow our green
product offering to the market.
Wacker procures bio methanol from
BioMCN to produce a fossil free silicone,
BELSIL®eco & ELASTOSIL®eco, which
further decarbonizes a variety of products
Fertilizer
Green fertilizer
Melamine
Green Melamine
Ammonia, ACN, Caprolactam, etc
Green Ammonia, ACN, Caprolactam, etc
Methanol, Formaldehyde, Acetic Acid
Green Methanol, Formaldehyde,
Acetic Acid
Silicone, other
Green Silicone, other
End customer
Downstream production
at OCI and end customers
Natural gas
Green gas,
biogas, H
2
by
electrification
or other
Durable
Consumer
Goods
Healthcare
Plastics &
Resins
Contribution to SDGs
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
47
Acrylonitrile is a product that is widely used in
a broad range of applications.
With OCI’s low carbon ammonia, combined
with low carbon propylene sourced separately,
AnQore decarbonizes acrylonitrile by 60%.
In turn, AnQore is helping its wide range
of customers to decarbonize important
consumer goods and equipment suppliers to
the wind power generation industry.
The relative cost price increase of
decarbonizing a product throughout a value
chain is often quite high for OCI. However,
as the cost increase of a decarbonized
component in an end-product is often
minimal, it is promising that customers are
increasingly aware of their environmental
footprint and increasingly willing to spare a
small premium for a more environmentally
friendly product.
This helps the participants in a value chain
cover their costs and investments involved in
decarbonizing their products.
Decarbonizing AnQore’s acrylonitrile value chain has begun with green
ammonia production at OCI Nitrogen
CASE STUDY
Contribution to SDGs
Scope 1 reduction of 50%
over grey ammonia
Lower carbon end products
• Windmill blades
• Mobile phones
• Surgical gloves
• Mattresses and furniture
• Rubber products
• Automotive parts
• Carbon Fiber sports gear
(e.g.: golf clubs)
• Small kitchen appliances
• Electrical connectors
• Protective headgear
• Medical equipment
-35%
Scope 3 reduction of 60%
over grey Acrylonitrile
1
Significant scope 3
reduction for OCI
and AnQore
-12%
< 0.5-2%
2
OCI produces
ISCC+ certified
low carbon ammonia
made
from biogas.
Strong potential to ramp up
green ammonia volumes through
expected customer demand pull.
AnQore produces
Econitrile
, theworld’s
first ever sustainableand
circularacrylonitrileproduced
from non-fossil ammonia and
propylene feedstock in an
existing acrylonitrile plant
1
AnQore sources a mix of renewable feedstock
2
Cost price increase in end-consumer product (e.g. car, mobile phone)
%
Relative price increase of low carbon ammonia in product
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
48
Delivering decarbonization with green ammonia
Decarbonizing our ammonia production
We are evaluating green ammonia initiatives across
our ammonia production portfolio.
First in Europe
Our Dutch fertilizer complex successfully produced
and sold green ammonia in 2019, the first ammonia
producer in Europe to add ISCC+ certified green
ammonia produced from bio-methane to its portfolio.
By using water electrolysis and
renewable electricity, ammonia
production can be made
completely carbon-free.
Green ammonia has multiple carbon-free uses,
including as a fertilizer, fuel, or source of energy
storage.
Fertilizer Transportation
Fuel cell vehicle Ammonia power plant
Textiles and
pharmaceuticals
Energy storage
Refrigeration
Solar power
Biogas
Wind power
Water electrolysis
How green ammonia is made What green ammonia can be used for Developing our green ammonia capabilities
Contribution to SDGs
Water or biogas for hydrogen
Clean Energy
Merchant ammonia
capacity
2.4MT
Gross ammonia
capacity
6.9MT
N
H
HH
NH
3
If produced globally, green ammonia could
reduce global GHG emissions by more than 1%
CASE STUDY
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
49
Melamine contributes to carbon capture and the circulate economy
Melamine and its end products are excellent
sources of carbon capture, as well as key
contributors to the circular economy.
• CO
2
is used to produce melamine, with each ton of melamine produced capturing a
ton of CO
2.
• Melamine is used in the production of various end products, so that carbon is stored
for at least several decades throughout the entire life cycle until recycling.
• Since over 75% of all melamine is used in wood-based products, with wood itself
already being a major carbon sink, today all melamine-based wood products are
actively storing significant volumes of CO
2.
Carbon capture
Waste reduction and the circular economy
Slow growing hardwood
80 years to mature
40% of the trees
used in production
ONE
OAK
40 years to mature
80% of the trees
used in production
Fast growing species
WOOD
EQUIVALENT
OF ONE OAK
2,000 m
2
parquet
floor for 20 homes
12,000 m
2
laminate floor
for 120 homes
Solid wood
applications
Melamine based
applications
• Melamine allows for more efficient use of wood by upgrading lower quality wood
from faster growing trees, providing an alternative to solid wood and combatting
deforestation
• Melamine’s durability and its use to extend the lifetime of wood-based products
contributes to waste reduction globally
• It also is used to make high value products from waste wood, contributing to the
circular economy
• As a laminate on wood-based productsand other surfaces, melamine extends the
lifetime of these products and offers design optionality
• As a material to produce household items, melamine issafe anddurable
Contribution to SDGs
Ammonia
Manufacturing of melamine
CO
2
1 metric ton of
melamine is estimated
to store 1 metric ton
of CO
2
CO
2
bound for
the lifetime of
the melamine
products*
* Estimated lifetime 20 - 50 years
CASE STUDY
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
50
In addition to our work on farmer education on nutrient application best practices, we have
invested in developing innovative products that improve crop yields while having a lower
environmental impact.
Our conventional nitrogen fertilizer products provide optimal crop nutrition due to their quality,
resulting in lower nitrogen loss and increased crop yields.
ISO 14040/14044 Life Cycle Assessment
As part of our ongoing assessment of the potential impact of our products on the environment,
during the year we conducted a life cycle analysis (LCA) with external verification of our CAN
and UAN in accordance with ISO 14040/14044 Life Cycle Assessment Standards. Based on
these externally verified assessments conducted by SGS, our CAN’s CO
2
footprint is amongst
the lowest in the world. Compared to European peers as benchmarked by Fertilizers Europe, our
CAN CO
2
footprint is approximately 33% lower than peers implementing best available emissions
technology. Our UAN CO
2
footprint is similarly best-in-class as it is produced in the same
downstream process of nitric acid as CAN.
ISCC+ Certified Green Ammonia
We are also the first ammonia producer in Europe to use bio-methane to produce and sell green
ammonia. The sustainable product and mass balance system is ISCC+ certified and can be used
to produce green downstream products.
Inhibitors and Controlled Release Fertilizers
Farming activities account for over 50% of GHG emissions in the nitrogen fertilizer value chain.
In addition to the farmer education programs in place to improve fertilizer use efficiency, we are
evaluating the introduction of urease and nitrification inhibitors as well as other controlled release
coatings to our nitrogen fertilizers, which have the potential to reduce scope 3 N
2
O emissions by
at least 24%.
GHG EMISSIONS – OUR APPROACH TO
ACHIEVING OUR TARGETS
Decarbonizing through
low-carbon product
innovation
Developing more effective fertilizers
Contribution to SDGs
According to Fertilizers Europe Care for Growth benchmark.
* Best available technology designed for production of CAN in EU
OCI CAN CAN (best
tech.*)
CAN (EU av.) CAN
(Russian)
350%
180%
150%
100%
OCI CAN CO
2
production footprint is lowest in Europe
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
51
GHG EMISSIONS AND ENERGY USE
Unit 2019 2020
Energy (Ammonia)
Energy consumption TJ 213,399
212,297
Energy intensity GJ / metric ton gross production 36.96
37.47
Energy (Consolidated)
Energy consumption TJ 290,955
300,142
Energy intensity GJ / ton product 18.60
18.68
Emissions to Air*
GHG emissions (Scope 1 – Direct)
million tons of CO
2
e 9.23
9.12
GHG emissions (Scope 2) million tons of CO
2
e 0.60
0.64
GHG emissions (Scope 3 - CO
2
to Downstream) million tons of CO
2
e 4.79
5.11
Total GHG emissions million tons of CO
2
e 14.62
14.87
GHG intensity
ton CO
2
e / N-ton 2.30
2.26
Scope 1 emissions covered under emissions limiting
regulations % (Scope 1 – Direct) 18.4%
16.4%
NOx metric tons 3,037
3,485
N
2
O metric tons 131
150
SO
2
metric tons 135
163
VOCs metric tons 55
46
Greenhouse gas intensity
2.30
2019
2.26
2020
Metric ton CO
2
e / nutrient ton
product
NOx intensity
0.48
2019
0.53
2020
Metric ton NOx / thousand
nutrient ton product
SO
2
intensity
0.02
2019
0.02
2020
Metric ton SO
2
/ thousand
nutrient ton product
* GHG emissions have been restated to EU ETS methodology, which includes CO
2
captured in
downstream production processes as Scope 1 emissions, versus Scope 3 as per the GHG Protocol.
2019 emissions restated to include a full year of Fertil and 50% of Natgasoline. GHG Intensity has
been restated on total ammonia and methanol production on a nutrient ton basis, with a correction
to Scope 3 emissions resulting in a lower 2019 baseline intensity versus the reported intensity in the
ESG Investor Day presentation.
** IFA 2019 global emissions benchmark
2020 energy and air emissions scorecard
9%
Improvement in group
energy intensity since 2016
31%
Reduction in SO
2
emissions since 2017
90%
N
2
O emissions are 90% lower
than global average for nitric
acid plants**
47%
Ammonia capacity under
10 years old versus 70% of
industry over 20 years old
2%
Year-on-year improvement in
Scope 1 GHG emissions intensity
46%
Reduction in NOx emissions
since 2017
51%
NOx emissions are 51% lower
than global average for nitric
acid plants**
52%
Total capacity under 10 years old;
youngest asset base compared
to peers
Contribution to SDGs
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
52
WATER AND WASTE – OUR APPROACH
Water Management approach
As water is an essential but finite resource, we work diligently to maximize our water efficiency and
are focused on reducing our water use wherever possible at all our sites.
We primarily use water in our production processes for cooling, steam generation, or in our
downstream aqueous products.
Our water management processes implement best available technologies wherever possible to
reduce our water use and maximize reuse and recycling of water in our production processes
to minimize our water discharge and our need for fresh water. Most of our water consumption
is recycled several times in closed loop systems to reduce our intake of freshwater wherever
possible and use non-potable water sources such as treated water from industrial sources and
seawater to reduce our impact. We have made significant investments to reduce our use of
freshwater wherever possible, and particularly at our sites in water stressed regions such as the
Middle East and North Africa where we have installed desalination units to use seawater instead of
freshwater.
Withdrawal and discharge
We closely monitor our water withdrawals and discharges at every facility and ensure any
discharged water is treated to meet applicable environmental requirements and safely discharged.
At several facilities, including those in Egypt and Iowa, we have invested in on-site pools to safely
evaporate discharged water, or treat the collected water for irrigation. Some of our facilities benefit
from interconnections with neighboring plants, allowing them to safely recycle water for use in
other facilities’ production processes.
We meet or exceed all water quality regulations and permits through our water management
and treatment processes to ensure we do not impact local water sources. Water management
- including water quality - is a key element of our overall HSE and resource use management
systems and is monitored by the Board of Directors’ HSE & Sustainability Committee.
We continuously review our water management processes, our water use, and evaluate ways in
which we can improve our water stewardship at every facility.
Waste, effluents, and spills
Our production processes for nitrogen and methanol products produce limited by-products and
are not waste intensive. Our distribution processes are primarily bulk shipments with minimal
packaging required. Almost all the waste we produce is non-hazardous and primarily result from
maintenance activities. Each facility monitors and minimizes its hazardous and non-hazardous
waste through active waste management programs. The primary source of hazardous waste is
spent catalyst, which is disposed of safely as per local regulations. We minimize potential waste
leakage, effluents, or spills through primary and secondary containment systems that are regularly
inspected. All processes undergo regular reviews by our HSE teams to identify and implement
waste reduction opportunities where possible.
In 2020, our facilities reported 37 environmental incidents (EI), representing an environmental
incident rate (EIR) of 0.66. None of these incidents were classified as major and more than
half related to a stringent waste-water iron content permit at IFCo, for which we successfully
commissioned pipeline in 2021 to permanently resolve the issue. Excluding this repetitive permit
exceedance, our EI's totaled 16 with an EIR of 0.29.
Contribution to SDGs
RT-CH-140a.3
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
53
WATER AND WASTE – OUR APPROACH
CONTINUED
Each plant
works to
maximize water
efficiency
Water is sourced from
seawater, municipal sources,
wells, and surface water.
Water is used in the production process
in several ways, such as cooling
water, as steam, or as a raw material
for our downstream products. Water
is circulated and re-used many times
throughout our production cycles
Following several cycles through our plants,
water is recycled by neighbouring plants where
interconnections exist or is safely released as
unpolluted water vapour.
Water is treated at water
treatment facilities to
ensure it is safe and clean.
Water is safely discharged as per local
regulations, or further recycled as
irrigation water.
1
5
1
4
2
3
RT-CH-140a.3
Contribution to SDGs
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
54
WATER AND WASTE – 2020 PERFORMANCE
Contribution to SDGs
Unit 2019 2020
Effluents and waste
Hazardous waste reused, recycled or recovered Thousand metric tons 1.98
1.69
Hazardous waste treated or disposed of Thousand metric tons 1.33
1.61
Non-hazardous waste reused, recycled or recovered Thousand metric tons 2.17
2.22
Non-hazardous waste treated or disposed of Thousand metric tons 30.57
44.33
Water*
Total intake by source
Million cubic meters
88.6490.01
Groundwater Million cubic meters 14.84
15.43
Seawater Million cubic meters 49.43
48.00
Surface water Million cubic meters 20.72
20.69
Third party water Million cubic meters 3.65
5.89
Total water discharge by destination
Million cubic meters
52.1347.35
Groundwater Million cubic meters 2.28
2.17
Seawater Million cubic meters 41.17
37.88
Surface water Million cubic meters 5.01
1.43
Third party water Million cubic meters 3.67
5.87
Water Stress
Water withdrawn in regions with High or Extremely High
Baseline Water Stress
% 72%
70%
Water consumed in regions with High or Extremely High
Baseline Water Stress
%
59%
55%
Environmental incidents
Environmental incidents
# 36
37
Environmental Incident Rate (EIR) Per 200,000 hours worked 0.59
0.66
2020 water and waste scorecard
47%
Water consumed, reused,
or recycled
2.27
Million cubic meters of total
water re-used or recycled
30%
Reduction in water consumption
per ton year-on-year
72%
Water intake from seawater in
high stressed regions
•
Surface water 23%
•
Groundwater 17%
•
Seawater 53%
• Third party 7%
2020 water
intake by source
Total water intake
90.01 million cubic meters
•
Surface water 3%
•
Groundwater 5%
•
Seawater 80%
• Third party 12%
2020 water
discharge by source
Total water intake
90.01 million cubic meters
* Excludes seawater used for cooling at FERTIL in a ‘once-through’ system, where seawater intake volumes flow through heat exchangers and
are safely discharged uncontaminated back to the sea.
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
55
WATER AND WASTE – CASE STUDY
RT-CH-140a.3
Contribution to SDGs
Minimizing freshwater consumption in water stressed regions
Our Middle East and North African (MENA) operations work diligently to minimize their use of
freshwater given the high stress on water resources in the region. We have invested in reverse
osmosis and seawater desalination units on-site at all our MENA locations.
Our assets in Egypt source approximately 51% their water intake by using reverse osmosis units
to desalinate non-potable water and our production facilities in Algeria and the UAE source 100%
of their water intake from the sea.
Our goal is to become fully self-reliant on sustainable water sources and reduce our reliance on
fresh water sources at all our MENA assets. Actions being taken to address water sustainability
in Egypt include:
• Increasing our access to sustainable groundwater wells through local investments
• Investing in increasing capacity and efficiency of our on-site reverse osmosis units, treating
and upgrading groundwater
• Investing in wastewater plants to re-use/re-cycle more water from the production process
• Continuing to make use of any water discharge to grow our land reclamation project
Zero effluent discharge
Both Fertil and EFC have implemented a novelsolution to the large quantity of water produced
as a by-product of the urea manufacturing process. The facilities invested in the construction of
irrigation and evaporation ponds to avoid discharging effluents into the environment. EFC is the
only plant in Egypt to do this, with three ponds capable of holding a total of 15,000 cubic meters
of water. Fertil has two ponds capable of holding a total of 24,800 cubic meters of water.
Water recycling and reuse
During the year, EBIC implemented a wastewater treatment and re-use closed loop system for
cooling water that reduces the plant’s water intake by approximately 5%.
Land reclamation in the Egyptian desert
The water collected at EFC’s irrigation ponds is used to irrigate 50 acres of forestry that was
planted by EFC in the nearby desert, contributing to essential land reclamation in the Egyptian
desert and creating an additional source of carbon sequestration. The 50 acres of forestry
sequester an estimated 39 metric tons of carbon dioxide a year.
1.62
Million cubic meters of water
re-used for irrigation in the
Egyptian desert
50
Acres of land reclaimed in the
Egyptian desert through our
water recycling efforts
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
56
FEED THE WORLD
The world continues to face a significant challenge in ensuring a
sustainable supply of food for our burgeoning global population,
which is expected to reach nearly 10 billion people by 2050. This is
expected to require a doubling of food production levels, all while
arable land per capita is projected to decline by 55% by 2050. With
growing populations and declining resources, crop yield optimization
is imperative to meet our global food needs, while also minimizing the
environmental impact of agriculture and fertilizer use.
Fertilizer use is essential to maximize yields, minimize soil
degradation, and sequester carbon dioxide
Nitrogen fertilizers are the key nutrient for crop growth and
development. High quality soil maximizes farm yields and ensures
healthy crops, which in turn naturally sequester carbon dioxide to help
fight climate change.
Efficient farming through correct fertilizer application helps farmers
maximize the use of existing farmland and reduces land sequestration.
OCI’s fertilizer products help achieve sustainable agriculture by
providing an effective and environmentally sound source of nitrogen. By
using nitrogen fertilizers effectively, farmers can:
• grow more food on their land,
• reduce soil nutrient loss and improve soil quality, and
• reduce the need for new farmland to be sequestered, which
therefore reduces GHG emissions by limiting deforestation.
Without annual application of nitrogen fertilizers to replenish soil
nutrients, soil health is eroded resulting in lower yields and biodiversity
loss amongst many issues.
Promoting nutrient stewardship
Incorrect or inefficient fertilizer application can result in nitrogen release
into the atmosphere as well as leaching or run-off into groundwater or
surface water, which can negatively impact water quality and aquatic
biodiversity.
We work with industry associations to
educate farmers on fertilizer
application
, storage,
provide digital resources, and to encourage
sustainable farming
. In the US, we support the 4R Nutrient
Stewardship program through our membership in The Fertilizer Institute
(TFI).
Other environmental impacts
Biodiversity
None of our production facilities are located near protected areas
or areas of high biodiversity, and we are not required to maintain a
biodiversity management plan for any of our sites. We comply with
all relevant regulatory requirements and environmental policies when
assessing new projects, which would include environmental and
biodiversity impact assessments wherever relevant.
Nitrogen fertilizer use helps improve agricultural efficiency, which
protects biodiversity by maximizing yields of existing farmland thereby
reducing the need to sequester new land for farming.
Other emissions to air
We have installed the necessary equipment - such as de-NOx units,
methanol removal units, and Selective Catalytic Reduction (SCR) units
– at our facilities in line with our policy to implement Best Available
Control Technology (BACT) to minimize our environmental impact.
Accordingly, we emit minimal amounts of nitrous oxide (N2O), nitrogen
oxides (NOx), sulfur oxides (SOx), particulates, and volatile organic
compounds (VOCs), as reported on page 52.
We are committed to working
towards global food security.
Through various programs,
we work with our customers
around the world to maximize
yields, strengthen crops,
prevent soil degradation,
promote sustainable
agricultural practices, and
accelerate growth to meet the
world’s rising food demands.
We also work to ensure our
products are used in a way
which safeguards health,
occupational and public safety
and security, biodiversity, and
the environment.
Contribution to SDGs
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
57
Contribution to SDGs
FEED THE WORLD – CASE STUDY
Digital Farming
While nitrogen fertilizers
offer a sustainable means
of maximizing yields, farmer
education is essential to ensure
nitrogen fertilizer application is
optimized for both production
and environmental protection.
We work with farmers around
the world through various
initiatives to achieve this goal.
Our digital offerings include the
Nutrinorm
agronomy website, and two applications
developed specifically for farmers:
•
OCI Agro Weather app
to optimize farmers' activity planning.
•
OCI Nutri-N app
for an optimal nutrition application.
Using these resources, our customers can ensure fertilizer quality is
maintained through correct storage, blend products correctly, ensure
spreading settings are correct to maximize even fertilization, calculate
optimal fertilizer release, accurately track the weather, and receive
24/7 access to the support they need.
>112,000 USERS
Our digital resources reached over 112,000
users in 2020
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
58
Sustainability
Report | Social
OCI N.V.
Annual Report 2020
59
HOW WE CREATE VALUE
FOR OUR COMMUNITIES
RT-CH-210a.1
Our operations directly and indirectly create
significant economic opportunities for our
communities in both developed and developing
countries through payments for goods and
services, job creation, improved farmer
productivity, taxes, research and development,
and donations to develop the communities in
which we operate.
We have invested more than $5 billion in
growth and improvement projects in under
a decade, which has created thousands of
ancillary businesses and job opportunities.
In 2020, we created $3.47 billion in value, of
which 82.9% was redistributed. The balance
was reinvested in OCI, primarily as capex.
$3.47BN
$2.88BN
ECONOMIC VALUE
GENERATED
IN 2020
ECONOMIC VALUE
DISTRIBUTED
IN 2020
Payments
to suppliers
63.2% 9.2%
Employee wages
and benets
10.5%
Payments to providers of
capital, governments, and
donations to communities
Value retained in OCI
through capex and other
investments
17.1%
Contribution to SDGs
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
60
We endow time and resources into the entire
education value chain, from donating school supplies
to children in need and rewarding high achievers by
funding university scholarships and providing on-site
training opportunities.
Our local operations have worked hard to encourage
students of all ages to pursue an education in fields
of science, technology, engineering and mathematics
(STEM) through various initiatives. We also participate
in programs specifically designed to encourage girls to
pursue STEM, such as Girlsday.
In 2020, despite the lack of in-person programs due
to COVID-19 restrictions, 412 students and young
professionals benefited from the training or education
opportunities availed through the programs we
participated in or sponsored in Europe, the United
States, and North Africa.
Our plants pay close attention to the social causes
that matter to each community to effectively
participate in local development. Such causes include
sponsoring or donating time to local sports teams,
music and arts festivals, food banks, toy runs, youth
programs, and animal rights causes.
In addition, we have strong ties to local healthcare
initiatives that provide necessary physical, mental, and
emotional support to our communities. Our plants
work with trusted partners focusing on the issues that
significantly impact their communities, including elderly
care centers, cancer treatment and support, essential
supplies for the underprivileged, and programs that
encourage healthy living.
HOW WE CREATE VALUE
FOR OUR COMMUNITIES
CONTINUED
A tailored approach to each community
As a local employer in each of our communities, we are proud to have strong stakeholder engagement programs
in place that allow us to identify and participate in the social development causes that matter most locally.
Accordingly, we have cultivated local social development programs tailored to the specific needs of each of our
communities to maximize the impact of our donations. In addition to our sponsorships and financial contributions
to various causes, our employees personally invest their time in our local communities by participating in
fundraisers and volunteering at events.
EDUCATION
SOCIAL CAUSES
>330,000
Meals provided in
South East Texas since 2015
>12,100
Students reached since 2015
>$45,000
Value of food and essential products donated to
vulnerable community residents in 2020
>8,000
Vulnerable residents provided Christmas
meals and gift hampers in London in 2020
Contribution to SDGs
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
61
HOW WE CREATE VALUE
FOR OUR COMMUNITIES
CONTINUED
Our 2020 Outreach
In 2020, we continued to focus on investing on the social causes that matter to each of our communities. Our
tailored approach allows us to create a meaningful and sustained impact through longstanding partnerships with
charities and non-profits serving our communities, such as Southeastern Iowa Community College’s Building the
Dream program, the Girlsday science and technology program in Geleen, and the Southeast Texas Food Bank.
Please refer to
Our Stories
for more examples of how we create value for our communities.RT-CH-210a.1
• Throughout the first wave’s PPE shortage,
our facilities in the United States and the
Netherlands regularly donated face masks,
gloves, safety glasses, other PPE equipment,
gift cards, and men’s dress shift to be used
as makeshift hospital gowns to local front line
hospital staff.
•
In October, IFCo ran a food drive encouraging
employees to donate food and supplies to
Lee County food pantries.As a result of IFCo
employees' generosity, IFCo was able to donate
$10,000 worth of food and supplies to help
support the community.
• In December, OCI and its employees donated
$22,000 to a collective of UK frontline charities
working to provide Christmas hampers
consisting of a full meal and gifts for vulnerable
residents in the London borough of Kensington
and Chelsea. 8,365 people were served through
the campaign with 4,031 hampers delivered.
Serving our communities during the COVID-19 pandemic
#Orangetheworld
In an act of solidarity, OCI Nitrogen
turned its cooling tower orange
on 25 November. OCI Nitrogen's
cooling tower was one of many
landmarks tinted orange around
the world in support of the Orange
the World initiative, a United
Nations campaign fighting violence
against women.
Orange symbolizes a brighter
future, free of violence. Other
participating landmarks included
Times Square, Niagara Falls, and
the Brandenburg Gate.
Contribution to SDGs
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
62
HOW WE CREATE VALUE FOR OUR
COMMUNITIES – CASE STUDY
Partnering with the Sawiris Foundation for Social Development
In 2020, we entered into a
partnership with the Sawiris
Foundation for Social
Development (SFSD) to
support vulnerable farmers
and boost the agricultural
sector in Egypt.
Empowering Egyptian farmers
We will work to ensure beneficiaries become self-sufficient and are able
to earn a sustainable income through an education program focused on
sustainable farming practices, with the aim of enhancing environmental
protection, growing production, and increasing farmer profitability. The
partnership’s outreach program will complement an SFSD program that
was launched specifically for agricultural development in Egypt.
About the Sawiris Foundation for Social Development
Established in 2001, the Sawiris Foundation for Social Development is
one of the first national donor foundations in Egypt. SFSD focuses on
funding and delivering sustainable development solutions to alleviate
poverty and social and economic exclusion, as well as provide equitable
educational opportunities for the most marginalized groups in Egypt,
all in cooperation with civil society, and the private and governmental
sectors. SFSD’s four focus areas are:
RT-CH-210a.1
HIGH-QUALITY EDUCATION
• Providing scholarships for
distinguished Egyptian
students
• Establishing specialized
higher education institutions
capable of meeting the urgent
needs of society
• Supporting and financing
education programs at all
levels: from kindergarten
through to higher education
SOCIAL EMPOWERMENT
• Improving access to
health care services (e.g.
fighting Hepatitis C, liver
transplants, improved
maternal and child health)
• Providing marginalized
children protection and
support
• Improving infrastructure of
underprivileged villages and
areas
ECONOMIC EMPOWERMENT
• Financing training programs
that lead to employment
• Encouraging small
and microenterprise
development through
providing capital financing
in the form of grants and
loans, along with technical
and administrative support
•
agricultural development
programs
ENCOURAGING ARTISTIC
AND CULTURAL CREATIVITY
• The Annual “Sawiris
Cultural Award”
• Sawiris Scholarship for
Arts and Culture
Partnering with OCI
Contribution to SDGs
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
63
HOW WE CREATE VALUE FOR OUR
COMMUNITIES – CASE STUDY
CONTINUED
SFSD in numbers | 2001-2020
RT-CH-210a.1
ECONOMIC EMPOWERMENT SECTOR
+117,000
Beneciaries
+344
EGP million in funding
Training for Employment Program
+54,000
Beneficiaries
trained and employed,
with a total budget exceeding
EGP 206 m
Micro-Credit & Agricultural
Development Program
+63,000
Beneficiaries
have received micro and small loans
with a total budget exceeding
EGP 138 m
SOCIAL EMPOWERMENT SECTOR
+377,000
Beneciaries
+569
EGP million in funding
Infrastructure Development &
Children without Shelter Program
+48,000
Beneficiaries
received a range of integrated services
including rehabilitation, education,
shelter and healthcare with a total
budget exceeding
EGP 255 m
Health-Care
Program
+137,000
Beneficiaries
received healthcare services including
Hepatitis testing and treatment
operations with a total budget
EGP 212 m
Covid-19 Response
+192,000
Beneficiaries
served and supported in dealing
with the ramifications of Covid-19
with a total budget
EGP 102 m
Contribution to SDGs
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
64
HOW WE CREATE VALUE FOR OUR
COMMUNITIES – CASE STUDY
CONTINUED
SFSD in numbers | 2001-2020 Continued
RT-CH-210a.1
EDUCATION AND SCHOLARSHIPS SECTOR
+60,000
Beneciaries
+777
EGP million in funding
PARTNERSHIP SECTOR
Scholarships
Program
1,113
International and local scholarships
were awarded to outstanding
Egyptian students
with an estimated
budget of
EGP 272 m
Basic, Vocational & Technical
Education Programs
59,000
Beneficiaries
of these programs with
an estimated budget of
EGP 505 m
SFSD has
49 partners
executing development programs
and initiatives with a total budget of
EGP 530 m
SAWIRIS CULTURAL AWARD
203
Egyptian writers and
authors won awards with a total
budget exceeding
EGP 22 m
GEOGRAPHICAL SCOPE
86%
of the support is
directed at villages
in Upper Egypt
Egypt
24
Governorates with
focus on the most
impoverished villages
Outstanding Egyptian students were
awarded scholarships to study at some
of the top universities in
Switzerland,
UK, USA and Germany
International
Contribution to SDGs
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
65
OUR EMPLOYEES
Our approach
Our people are fundamental to our success. We strive to create
a safe and encouraging workplace where there is mutual trust
and respect towards and amongst employees. We promote
excellence in every aspect of our operations by investing in our
people to foster their development and encourage their passion
to excel.
A local employer, globally
We are proud to have cultivated a strong community focused
identity as a local employer with 3,682 employees around the
world. We have a commitment to maximize the use of local
resources whenever possible by drawing local people into our
company and developing their skills, and by choosing local
partners where possible to supply materials and other services.
Living wage
We are mindful of the importance of ensuring that all employees
are compensated and have crafted our local compensation
frameworks using each country’s living wage as the baseline.
We believe that when an employee can afford their family’s
needs including discretionary income, they are more motivated
to succeed. We consistently rank amongst the top quartile of
employers by annual compensation in each of our communities.
In addition to top quartile compensation, we offer all employees,
including part-time employees, a range of benefits, including but
not limited to health insurance, retirement plans, parental leave,
and other non-financial benefits in line with local employment
laws.
Diversity and inclusion
Our employment strategy has resulted in a diverse global
workforce encompassing 32 nationalities located in ten
countries, with multiple ethnicities, religious beliefs, cultures,
ages, and other traits working together respectfully and with a
shared sense of purpose.
Our Code of Conduct requires all employees to act with
honesty and integrity to foster a business environment that
protects the rights and interests of all stakeholders. Our Code
of Conduct also highlights our zero-tolerance policy for any
form of harassment or bullying. Employees are required to
treat all individuals with respect, tolerance, dignity, and without
prejudice to create a mutually respectful, collaborative, and
positive working environment. We do our utmost to provide
employees with a safe environment to address any issue directly
with management, and through our Whistleblowing Policy we
also provide a confidential procedure to raise any concerns,
instances of discrimination, and other breaches to our Code of
Conduct.
We are committed to fostering an inclusive culture and have
launched a group wide D&I program, which aims to ensure
fairness, equality, and diversity in recruiting, compensating,
motivating, retaining, and promoting employees. Though we
operate in traditionally male dominated industries, we are
working to improve our gender diversity in both technical and
non-technical roles and at all levels of our organization. We have
set internal benchmarks and targets to improve our recruitment
processes, conduct de-biasing training, provide sponsorship
and mentorship of minority employees, and develop employee
networks that help them succeed. During the year, the majority
of our workforce completed the de-biasing training, with the
balance expected to complete the training in 2021. Despite
limitations on hiring during the COVID-19 pandemic, we
improved the ratio of female-to-male hires by 16% in 2020
versus 2019.
With an eye on the future of our industry, we also support
Science, Technology, Engineering, and Mathematics (STEM)
education programs in many of our local communities, with
a focus on girls and minority students. At the Board level, we
implemented a Board D&I policy in 2019 and have recently
appointed a third woman to our Board who also has substantial
ESG expertise, taking the percentage of female board members
to 23% from 17%. Women as a percentage of total employees
increased marginally to 10.51% in 2020 from 10.34% in
2019. Approximately 20% of leadership positions across the
organization were held by women. We will continue to work
towards increasing gender diversity while continuing to hire or
promote based on merit.
Employee Engagement
We strive to encourage open dialogue across all levels of
the organization, including with senior management. We
launched the OneOCI platform in 2020 to provide employees
with regular updates on a variety of corporate, operational,
and industry matters, enhance communication across the
group, create opportunities for employees to connect across
countries and functions, and provide an additional means to
reach senior management. We also conduct surveys at the
group and local levels to gather feedback on various topics. We
value the feedback from these engagement channels and are
continuously making improvements to enhance all employees’
experiences at OCI.
Talent development and retention
We are committed to fostering an environment that encourages
individuals to seek opportunities for professional growth and
enrichment. We recognize the importance of training and
development of new employees, improving the performance of
experienced employees, and building future leaders. We invest
in our employees through training and development programs
focused on professional growth and enrichment. Opportunities
are tailored to the needs of each employee, and can include
on-the-job practical training programs, sponsoring higher
education, mentorships and leadership programs for succession
planning, and online courses.
We promote a culture of CARE – collaboration,
agility, resourcefulness, and excellence.
Contribution to SDGs
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
66
OUR EMPLOYEES
CONTINUED
Succession planning
We have a succession planning process in place for critical roles
across the organization, both at the corporate and the operating
company levels. This is key to talent retention and development,
and to mitigating potential human capital risks.
Unions and Works Councils
Our employees can join a union, works council, employee association,
trade union, or similar labour organizations in line with local regulations.
As such, approximately 46% of our total workforce is covered by
Collective bargaining or unions. We strive to maintain productive
relationships with the labour organizations representing our employees
and engage with them regularly.
Human rights and working conditions
We are committed to respecting and promoting human rights and safe
working conditions.
We conduct all business activities responsibly, efficiently, transparently,
and with integrity and respect towards all stakeholders. This
expectation extends to our suppliers and business partners, who are
required to conduct their business according to the principles included
in our Business Partner Code of Conduct.
These principles are based on global human rights standards, including
the International Bill of Human Rights, the International Labour
Organization’s declaration on Fundamental Principles and Rights at
Work, and the United Nations International Children’s Emergency Fund
(UNICEF). Accordingly, our suppliers cannot use forced or child labor,
or engage in slavery or human trafficking.
These principles also form part of our Human Rights Policy, which
falls within our Compliance Framework and aims to ensure that salient
human rights issues potentially arising through our supply chain are
tackled effectively. We perform customary due diligence to ensure
our suppliers and business partners are compliant and have an
anonymous reporting hotline where employees can report suspected
violations throughout our supply chain.
Gender
Location
Age profile
New hires
Years of service
Contract type
•
Female
11%
•
Male
89%
•
Europe
19%
•
USA
11%
•
MENA
70%
•
under 25
2%
•
25-34
18%
•
35-44
42%
•
45-54
25%
•
55-64
12%
•
65+
1%
•
Female
21%
•
Male
79%
•
0-5 years
22%
•
6-10 years
25%
•
11-20 years
43%
•
21+ years
10%
•
Full-time
98%
•
Part-time
2%
Our employee
engagement priorities
•
Diversity: increase gender diversity and
inclusion across the group
•
Development: increase training and
development opportunities for all employees
•
Dedication: maintain our low voluntary
turnover rates at under 3%
•
Drive: provide employees with the
resources they need to feel engaged,
empowered, and driven to deliver
Our human rights
policy principles
•
No forced or child labor
•
No harassment or discrimination
•
Safe and healthy workplace
•
Fair compensation and living wage
•
Equal employment
•
Freedom of association and
collective bargaining
Links to policies
Code of Conduct
Diversity & Inclusion (D&I)
Board D&I
Whistleblower Policy
Human Rights Policy
Contribution to SDGs
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
67
OUR EMPLOYEES
CONTINUED
3,682
Direct employees
in 2020
16%
Improvement in female-to-male
hiring ratio in 2020
2.2%
Voluntary turnover rates
32
Nationalities in our
global workforce
34%
Increase in female employees
in technical roles
46%
Employees covered by
collective bargaining or unions
$93K
Average employee
annual compensation
20%
Percentage of women in
leadership positions
Working at OCI Unit 2019 2020
Employees*
Total employees # 3,715
3,682
Full-time # 3,622
3,602
Part-time # 93
80
Engagement and development
Voluntary turnover rate % 1.99%
2.20%
Employee absenteeism % 2.97%
1.89%
Employees covered by Collective Bargaining orUnions % 47.32%
46.14%
Average spending on training and development $ / employee 1,442
218
Compliance & Governance
Incident notifications # 12
9
Incidents investigated # 12
9
Substantial cases # 0
0
Anonymous notifications via hotline # 3
1
Cybersecurity training (various topics)** # employees reached 1,938
1,921
Compliance training (various topics, incl. CoC, ABC,
Debiasing, Data privacy, and others)* # employees reached
973
2,002
Gender
Women % 10.34%
10.51%
Women in technical roles % 1.10%
1.49%
Women non-technical roles % 9.23%
9.02%
Women on the Board of Directors % 16.67%
23.08%
Women in leadership positions %
18.18%
20.24%
Age profile
under 25
% 1.68%
1.90%
25-34 % 21.34%
18.12%
35-44 % 41.82%
42.07%
45-54 % 22.29%
25.07%
55-64 % 12.12%
11.92%
65+ %
0.76%
0.92%
Years of service
0-5 years
% 27.26%
21.67%
6-10 years % 25.29%
25.12%
11-20 years % 36.85%
42.78%
21+ years % 10.60%
10.43%
Contribution to SDGs
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
68
CASE STUDY
Promoting a culture of CARE through OneOCI
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COLLABORATION
Working across our diverse
cultures with mutual
respect, inclusion, drive,
and innovation
AGILITY
Working dynamically and
swiftly to capitalize on
opportunities and adapt
to change
EXCELLENCE
Working with an
emphasis on safety,
ownership, and integrity
We promote
a culture of
CARE
VALUES
RESOURCEFULNESS
Working diligently
and proactively to create
exceptional value for all
our stakeholders
Collaboration
We work across our diverse cultures
with and
mutual respect
, inclusion
, drive
,innovation
• We foster an inclusive culture in which diversity is
recognized and valued
• We strive to be an employer of choice, where each
person is proud to contribute their knowledge,
skills, experience and perspectives
• We treat all individuals with respect, tolerance,
dignity, and without prejudice to maintain a positive
and encouraging workplace
Agility
We work
dynamically
and swiftly
to capitalize on opportunities and adapt to
change
• We maintain our competitive edge by quickly
recognizing, accepting, and adapting to
change
• We empower our people with the tools,
resources, and autonomy to be innovative and
creative
• We find smarter ways of working to increase
productivity and improve profitability
Excellence
We work with an emphasis on
safety,
ownership,
and
integrity• We are focused on safety in every aspect of our
organization with a goal of zero incidents
• We commit to being good stewards of the
environment, as well as being a good neighbor
• We deliver quality products and exceptional
services that our customers can rely on
Resourcefulness
We work
diligently
and proactively
to create
exceptional value for all our stakeholders
• We drive success by taking pride in everything
we do to perform reliably, efficiently, and with
unwavering integrity
• We are transparent in our business practices, and
lead by example
• We are focused on delivering strong and
sustainable financial growth
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
69
HEALTH AND SAFETY
Our approach focuses on the following HSE priorities:
1. Commitment to zero injuries
2. Focus on operational excellence
3. Continuous improvement of our processes
4. Health and wellness of all employees
5. Product stewardship & chemical safety
We believe that the health and safety of our employees is
essential to the successful conduct and future growth of our
business and are in the best interests of our stakeholders.
HSE policies and standards
Our HSE Policy is approved by the Board HSE & Sustainability
Committee, which is also responsible for supervising the group’s
overall HSE performance. The HSE Policy provides our sites and
employees with a clear set of standards and procedures based
on industry standards and global best practices.
Each facility additionally implements tailored initiatives and
supplemental procedures to enhance their HSE standards
depending on their specific needs and technologies, which are
reviewed and approved by the Corporate HSE team. Examples
of locally tailored programs include:
IFCo’s SafeStart program, a safety program that addresses
unintentional human error and critical safety habits; thereby
reducing risk and the probability of injury.
OCI Nitrogen’s Project ViS, a coordinated cluster of activities
aimed to deliver a safer facility through person, process, and
environmental safety.
HSE performance monitoring
The Corporate HSE team reviews and monitors all facilities’
site-specific programs and performance metrics, which are
implemented, maintained, and reported by each facility’s
management team in compliance with the HSE Policy. The
Corporate HSE team also assists the sites in implementing
the OCI HSE policy when required and reports each site’s
performance to the HSE Committee on a quarterly basis.
The HSE Committee sets groupwide and site-specific HSE
targets annually.
The Executive Directors review each site’s monthly HSE
performance and trends with local site leadership during the
monthly business review. In addition, HSE audits at each site
periodically assess the implementation of OCI’s HSE policy.
1. Commitment to zero injuries
Safety is a core focus in every aspect of our operations. Our
goal is to achieve leadership in safety and occupational health
standards across our operations by fostering a culture of zero
injuries at all our production facilities, and continuously improving
health, safety and environmental monitoring, prevention and
reporting across our plants.
We have integrated this goal into our corporate values, and into
the programs and policies of each of our production facilities.
Safety is considered an integral part of plant operation, quality
control, cost reduction and efficiency, and we are committed to
providing resources to enable this.
Occupational safety
We achieved record occupational safety results in 2020, with
a lost time injury rate of 0.09 and a total recordable injury rate
(TRIR) of 0.23. These results are well below our internal targets
and reflect a 44% improvement over 2019 despite a more
difficult operating environment due to the strict COVID-19 safety
precautions in place since March 2020. Most of the incidents
were contractor-related, with six of our sites achieving zero own
employee TRIs during the year.
We are proud of every employee’s diligence and attention to
safety, which has brought our TRIR down by 72% since 2014.
We view the improved rates in 2020 to be indicative of the
effectiveness of our safety incident learning and awareness
program, and the regular refresher sessions we conduct for all
employees as part of our training program.
We will continue to promote a strong safety culture and focus
on targeting zero injuries across our organization, both with our
own employees and with contractors.
Emergency preparedness
Every facility has emergency preparedness plans in place
with emergency response teams on-site. The emergency
preparedness plans and response teams are tested and trained
regularly. All sites also align closely with local police, fire, and
other emergency response providers to ensure the best possible
response protocols are implemented. Facilities located on
shared industrial sites also coordinate closely with the industrial
site facilities management teams.
During the year, more than 200 Emergency Response training
sessions were conducted, and each site conducted Emergency
Response drills and tabletop exercises as required by their local
regulatory agencies.
We are committed to
providing a safe and
healthy workplace for all
employees. We implement
the highest international
safety standards to avoid
any potential risks to
people, communities,
assets, or the environment.
RT-CH-320a.2
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
70
2. Focus on operational excellence
We promote excellence in every aspect of our operations
to ensure a safe and healthy work environment, protect our
communities, and optimize operational costs. We continuously
train all employees to implement the best sustainable practices
and maintain our focus on operational excellence.
Process safety
We implement a process safety management (PSM) framework
across our sites, which was developed based on international
industry best practices and standards including the U.S. OSHA
Process Safety Management regulations and AIChE Technology
Alliance – Center for Chemical Process Safety (CCPS)
information. Our PSM is further enhanced by case studies on
industry incidents and lessons learned.
We track process safety incidents (PSI’s) in three categories of
severity and take all incidents very seriously. We achieved a PSI
rate (PSIR) of 0.38 in 2020, well below our internal target of 0.8
but above our 2019 PSIR of 0.32. Most incidents were
related to minor leaks or releases of substances as a result of an
equipment failure or operator error, all of which were immediately
contained with no further impact. No personal injuries were
sustained in any of the PSIs and all PSI’s are reviewed with a
root-cause-analysis with lessons learned shared across all sites.
We continue to work diligently to reduce the number of PSI’s at
all our sites every year.
Global management and quality assurance standards
Our assets hold global certifications recognizing the quality
of our products and management processes, including ISO
9001 Quality Management Systems, ISO 14001 Environmental
Management Systems, and OHSAS 18001 Occupational Health
and Safety Management Systems. Other certifications include
REACH, International Sustainability and Carbon Certification
(ISCC), Fertilizers Europe Product Stewardship, and OCI
Beaumont is an OSHA VPP Star Site.
3. Continuous improvement of our processes
We regularly assess our HSE management systems to ensure
our processes enable operational excellence. We do so
through internal and external HSE audits, insurance reviews,
performance reviews, incident analysis, and groupwide
knowledge sharing. We reward HSE excellence, encourage
best practice sharing across our sites, and provide additional
support wherever needed to ensure all sites meet or exceed our
standards.
Groupwide knowledge sharing
We have set up several avenues to enhance and facilitate
communication and knowledge sharing across our global HSE
community. Examples include:
•
Weekly publication of a one-page HSE awareness article
called the Gazette addressing various HSE subjects on a
general level.
•
Monthly groupwide safety calls to share learnings of
occupational and process safety incidents and to initiative
companywide improvement initiatives.
•
Quarterly groupwide environmental calls aligning on
environmental improvements and regulatory affairs.
•
Publication of a quarterly multi-page HSE Newsletter
addressing specific HSE subjects in detail targeting HSE
engineers.
•
All sites generate one-page flyers of incidents and near
misses that are shared, and lessons learned with fellow
colleagues during the monthly Process Safety Sharing
Incident Teleconferences
•
Annual internal global OCI Process Safety conference, where
various safety and risk assessment topics are discussed by
our process safety experts from across our sites. The main
topics in 2020 were new process safety KPIs, leak prevention
rules, best practices sharing from the sites’ Process Safety
Management program, learning form sites’ key safety
incidents, and plant insurance inspections.
In addition, we reward excellent HSE performance through an
annual awards ceremony called the OCI HSE Award, which is
presented by the VP of Manufacturing.
HEALTH AND SAFETY
CONTINUED
Plant certifications
Plant
ISO
9001
ISO
14001
ISO
45001 /
OHSAS
18001 REACH Others
OCI Nitrogen
✔
✔
• Fertilizers Europe - Product Stewardship certificate
• ISCC (International Sustainability and Carbon Certification) Green Ammonia
BioMCN
✔
✔ ✔
• ISCC
OCI Beaumont
✔
✔
• OSHA VPP STAR
• ISCC
EFC
✔
✔ ✔ ✔
• DEF added to ISO 9001
EBIC
✔
✔ ✔ ✔
Fertil
✔ ✔ ✔
• ISO 50001 – Energy Management System
•
RC 14001 – Responsible Care Management System
Sorfert
✔
IFCo
Natgasoline
RT-CH-320a.2
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
71
HEALTH AND SAFETY
CONTINUED
4. Health and wellness of all employees
Occupational health and general well-being is part of our overall
HSE management, and we implement wellness programs
across the organization to ensure that everyone working at OCI
remains healthy.
A Fitness for Duty Process is set up to ensure that each
employee can safely perform the essential physical and mental
requirements of the job. A Health Risk Assessment Process is
in place to estimate the nature and probability of adverse health
effects to people by identifying the adverse health effects that
can be caused by any exposure to any hazardous agent or the
work environment.
5. Product stewardship & chemical safety
Product stewardship ensures that our products and their raw
materials, additives and intermediate products are processed
and manufactured, handled, stored, distributed, and used in a
way which safeguards health, occupational and public safety,
the environment, and which ensures security.
Approach
Product stewardship and chemical safety
is supervised by
the Board HSE Committee and subject experts from each facility
contribute to risks assessments and internal audits of the HSE
impact of our product portfolio.
We use the best available technologies to minimize our carbon
footprint and implement the Product Stewardship guidelines
developed by Fertilizers Europe and International Fertilizer
Association (IFA) throughout our production processes to
monitor and minimize our environmental, health and safety
impact from feedstock to farmer.
We comply with international standards as members of IFA,
Fertilizers Europe, The Fertilizer Institute (TFI), the International
Methanol Producers & Consumers Association (IMPCA),
the European Melamine Producers Association (EMPA), the
Ammonia Energy Association, and the Melamine REACH
consortium, among others.
We are committed to our obligations regarding any
environmental and health regulatory aspects of the chemicals
we handle, and we closely monitor regulatory and safety
developments for all our chemicals. Our products do not include
ozone depleting substances, persistent organic pollutants
(POPs), polyaromatic hydrocarbons (PAHs), or polychlorinated
biphenyls (PCBs) and do not contain any chemical classified
by REACH, or equivalent regulation, as substances of very
high concern (SVHC). We strive to substitute any identified
SVHC as raw material or intermediate where possible and if a
product cannot be substituted, we comprehensively assess the
risk potential of the substance by weighing the degree of HSE
risk and regulatory restrictions or classification, technical and
financial feasibility of developing a substitute, and stakeholder
concerns, amongst other considerations. We fulfil our
obligations by enforcing strict process and occupational safety
and product handling measures to minimize risks of exposure to
health and to the environment. We have identified five chemical
substances of concern, which we monitor and manage
carefully in line with regulatory processes and our HSE, product
stewardship, and chemical compliance policies and procedures.
We are also assessing alternative substances and regulatory
actions for these chemicals.
In line with our commitment to leadership in product and HSE
stewardship, during 2020 the Board formally ratified our policy
to not produce, sell or trade solid ammonium nitrate (AN)
given the product’s public safety concerns. This also allows
us to ensure that our business trajectory is in line with global
insurance and directors’ liability advice, which is increasingly
stringent around AN. With ever-increasing concerns surrounding
AN, the product could be substituted by much safer urea or
other nitrates going forward.
Safe product handling
We publish Safety Data Sheets (SDS) on our website for all
our products and substances. We monitor and evaluate the
environmental, health and safety data continuously and update
the information published in the SDS section of our website
regularly. SDSs provide safe handling, storage, disposal, and
personal protection equipment (PPE) information and disclosure
on potential health and safety effects due to exposure or
mishandling. All SDSs and product labels comply with applicable
laws and regulations, including but not limited to REACH, US
EPA, CEPA, and CLP. The safety data sheets are translated into
several languages to make them more accessible for our global
customers.
Stem cell technology, nanotechnology, genetic engineering,
and other emerging technologies
We do not make use of stem cell technology, nanotechnology,
genetic engineering, or any other emerging technologies.
Genetically Modified Organisms (GMOs) and neonicotinoids
We do not produce GMOs or neonicotinoids (pesticides), nor
do we make use of the technology. Through our participation in
farmer education programs, we promote the safe use of such
products in our supply chain.
Animal testing
We do not conduct animal testing.
RT-CH-320a.2
RT-CH-410b.2
RT-CH-530a.1
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
72
HEALTH AND SAFETY
CONTINUED
Unit 2019 2020
Safety
Lost Time Injury Rate - total Per 200,000 hours worked 0.16
0.09
Lost Time Injury Rate - employees Per 200,000 hours worked 0.07
0.06
Lost Time Injury Rate - contractors Per 200,000 hours worked 0.30
0.14
Total Recordable Injury Rate - total Per 200,000 hours worked 0.40
0.23
Total Recordable Injury Rate - employees
Per 200,000 hours worked 0.34
0.12
Total Recordable Injury Rate - contractors Per 200,000 hours worked 0.49
0.42
Fatalities # 0
0
Process Safety Incidents # 17
21
Process Safety Total Incident Rate
Per 200,000 hours worked 0.32
0.38
Significant Process Safety Incidents count 17
21
Major Process Safety Incidents count 0
0
Significant Process Safety Total Incident Rate cases per 200,000 hours worked 0.28
0.38
Major Process Safety Total Incident Rate cases per 200,000 hours worked 0.00
0.00
2020 SAFETY SCORECARD
11.14
Million man hours worked
5
Sites achieved
zero LTI’s
72%
Reduction in TRIR
since 2014
44%
Reduction in
LTIR since 2014
6
Sites achieved
zero employee TRIs
2
Smoking
free sites
ZERO
OCI Beaumont achieved 0 TRIRs
for the fth consecutive year
1.89%
Occupational illness rate
Lost Time Injury Rate
0.16
0.07
0.31
2019
0.09
0.06
0.14
2020
Total Recordable Injury Rate
0.40
0.34
0.49
2019
0.23
0.12
0.42
2020
Total
Employees
Contractors
Industry leading safety performance
0.09
0.35
LTIR
0.12
1.24
Employee TRIR
OCI
IFA (2019)
OCI Nitrogen receives
the 2020 OCI NV Safety Award
2M
2 million man-hours worked without
a lost-time injury zero LTI’s
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
73
HEALTH AND SAFETY – CASE STUDY
RT-CH-210a.1
Our response to the COVID-19 pandemic
In March 2020, we implemented our emergency response protocol and established a dedicated
COVID-19 Taskforce to ensure the safety of our employees and business continuity. The taskforce
is dedicated to closely monitoring developments and coordinating efforts across group to align
plans and policies to appropriate response measures, ensure contingency plans are in place,
conduct ongoing risk assessment and planning, provide corporate support, and keep employees
updated with facts and company actions.
Since the onset of the pandemic, our business operations have continued without interruption, as
our industries and our products have been designated as critical infrastructure by the respective
governments of each of our markets to ensure the uninterrupted supply of goods and other
essential products. We have applied strict protective measures, including sanitation, personal
protection equipment, social distancing and thermal testing prior to accessing any group
locations. As our plants are heavily automated, essential on-site operating and logistics personnel
can be limited and administrative and operational support personnel have worked remotely in
order to maintain social distancing following governmental guidelines.
Although the long-term effects of COVID-19 are still unclear, our current outlook is that our
financial and operating performance remains solid. We have operated our business in a remote
working environment and could continue to do so for an extended period of time, if necessary.
Developments in each jurisdiction are being closely monitored and protocols are flexible to allow
for rapid adjustments as needed. The impressive resilience of our staff throughout the period gives
all local management teams confidence to revert to a work-from-home policy again if needed,
without interruptions to our operations and supply chain.
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
74
Sustainability
Report | Governance
OCI N.V.
Annual Report 2020
75
OUR APPROACH
TO SUSTAINABILITY GOVERNANCE
TCFD Governance (a) (b)
TCFD Risk Management (a) (c)
Our corporate governance structure is designed in compliance with the requirements of the Dutch
Civil Code, the Dutch Corporate Governance Code (Code), applicable securities laws, our articles
of association, by-laws, and the rules and regulations of the Euronext in Amsterdam.
All governance policies and procedures are published on our
website
, and a full description of our corporate governance framework, Board composition, oversight and responsibilities,
shareholders’ rights, executive compensation and other governance topics can be found on in
the Corporate Governance section beginning on page 89.
Our ERM framework is described on pages 78-86 and our approach to climate risk is described
on page 37. Our Compliance framework, including our ethics and anti-corruption processes, is
described on page 87.
ESG and Sustainability Governance
ESG and sustainability are imbedded into all aspects of our organization, including our strategic
objectives, risk management, capital allocation and financial planning, operational and commercial
activities, and other medium and long-term decision-making.
Dedicated Board oversight
The Board of Directors has overall responsibility for OCI’s strategy, business objectives, and
risk management, including ESG and sustainability. The Board Health, Safety and Environment
(HSE) Committee evolved in 2021 to formally include sustainability and was renamed the HSE
& Sustainability Committee. The Committee’s responsibilities include overseeing our approach
to managing the risks and opportunities related to sustainability, climate change, and our
environmental impact. The Committee met four times in 2020 and its activities and areas of focus
during the year are described on page 97. In addition to its oversight over health and safety
topics, the Committee’s specific sustainability and environment related activities during the year
included:
• Oversight and supervision of the development of our long-term sustainability strategy, ESG
targets, and decarbonization pathway;
• Oversight and review of our environmental and sustainability risk identification and
management;
• Review of environmental performance, audits, and emergency preparedness plans;
• Review of the sustainability section of the annual report.
During 2020, Ms. Heike van de Kerkhof joined the Board as an independent non-executive
director and is a member of the HSE Committee. Ms. van de Kerkhof brings a wealth of ESG and
sustainability expertise to our Board.
Management of ESG
The Board has tasked the Executive Directors with the management of ESG and sustainability,
including the development and implementation of our ESG targets and strategy, supported by the
Group Corporate Affairs Director. Executive compensation is tied to ESG performance.
Each production facility’s leadership team is responsible for identifying and evaluating sustainability
projects and opportunities, and report on their progress to the Executive Directors during the
site’s monthly business review. The Capex Committee reviews and approves sustainability-related
capex with a view to balance our sustainability goals with our other commitments and investment
returns thresholds.
We appointed a Sustainability Director for Europe in 2020 to support our European assets with
their decarbonization projects.
During the year, we engaged an external consultant to assess our scope 1, 2, and 3 GHG
emissions to develop our decarbonization targets and strategy using 2019 as the base year as
described on page 39-40. We also engaged an external consultant to support the development of
our decarbonization strategy.
The Group Corporate Affairs Director and Investor Relations Director are responsible for internal
and external communications, including reporting of our ESG and sustainability performance,
strategy, and targets. This is closely aligned with financial and non-financial functions including our
internal audit and risk functions, legal and public affairs, business planning, and operations.
Risk Management of Sustainability
We perform a comprehensive assessment of our climate change, environmental and sustainability
risks and opportunities both at the operating company level and at the corporate level, assessing
relevance at each level according to extent and likelihood of impact. We incorporate sustainability
considerations into our assessment and management of all other risks relevant to the topic, such
as operations, finance, and regulatory risks.
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements Other information
Sustainability
OCI N.V.
Annual Report 2020
76
Risk Management
and Compliance
78 Enterprise risk
management and
internal control
81 Strategic risks
83 Operational risks
85 Financial risks
86 Regulatory risks
87 Compliance
OCI N.V.
Annual Report 2020
77
ENTERPRISE RISK MANAGEMENT
AND INTERNAL CONTROL
TCFD Risk Management (b) (c)
Business performanceStrategy and value creation Financial statements Other information
Risk management and compliance
Corporate governanceSustainability
OCI N.V.
Annual Report 2020
78Our approach
Our businesses inherently involve risks. Our management is cognizant of these risks and takes
a measured mitigation approach. Our Board and management foster a transparent company-
wide approach to risk management and internal controls, driven by our conviction that risk
management is most effective when it is aligned with our strategy, is integrated at all management
levels, and is as dynamic as the industry and environments where we operate, allowing us to
quickly act on value creation opportunities.
Enterprise risk management (ERM) framework
Risk management is a company-wide activity with roles and responsibilities allocated across all
levels of the group to secure our in-control position. Equipped with updated insights from the
market, industry, and geopolitics, we follow a bottom-up approach to ensure that all relevant
business risks are identified, managed, and reported in a timely and comprehensive manner. The
Internal Audit & Risk team is tasked with providing reasonable assurance to the Board of Directors
and to the Audit Committee that this risk management approach is adequate.
The Board has the overall responsibility of maintaining a sound and effective risk management
and internal control program. The Audit Committee supports the Board in monitoring our risk
exposure, including the design and effectiveness of our internal control program. While every OCI
employee is responsible for managing risk within his or her own area of activity, the Executive
Directors – and particularly the CFO - own the Group-wide risk landscape and leads the effort in
mitigating all types of risks.
The internal Audit & Risk team assists the Audit Committee, Executive management, and
local management by facilitating the identification of risks and the promotion of risk awareness
and ownership across our organization. The team is centrally managed at the group level and
operates across the operating companies. This ensures our Internal Control Framework (ICF) is
properly institutionalized and applied, that we have effective and up-to-date internal control and
internal audit systems in place, and that we are aligned with our external auditors.
Each quarter, executive management monitors and assesses the consolidated group risk profile
comprising of strategic, operational, financial and compliance risks with the involvement of key
stakeholders.
Our ICF is aligned with the Enterprise Risk Management Integrated Framework of the Committee
of Sponsoring Organizations of the Treadway Commission (COSO) and the Dutch Corporate
Governance Code. It is designed to provide reasonable assurance that the risks we face are
properly evaluated and mitigated, and that management is provided with all information necessary
to make informed decisions. Our Internal Audit function is certified by the Institute of Internal
Auditors (IIA).
OCI actively assesses the impact of climate-related, sustainability, and environmental risks
as described on pages 36-38. We also consider SASB Chemicals Sustainability Accounting
Standards along with TCFD recommendations when assessing our climate-related risks, as
described on pages 31 and 37.
ENTERPRISE RISK MANAGEMENT
AND INTERNAL CONTROL
CONTINUED
Our ERM and ICF systems are designed to proactively identify, monitor, mitigate, and manage risks:
TCFD Risk Management (c)
Business performanceStrategy and value creation Financial statements Other information
Risk management and compliance
Corporate governanceSustainability
OCI N.V.
Annual Report 2020
79OPERATING COMPANIES
•
First line of defense responsibility for
the establishment of an effective control
environment based on corporate
directives and policies
•
Operational management reporting, risk
assessment and mitigation
•
Internal controls implementation and self-
assessment
•
Weekly business updates to Corporate
office functions
•
Detailed monthly review of performance,
financials, operating issues, and key risks
•
Semi-annual risk self-assessments and
quarterly updates of their business risk
profiles and report to relevant Corporate
functions and executive directors
•
Local Internal Control Officer is
responsible for supporting local
management on the effective
implementation of internal controls and
the compliance framework
•
Detailed annual budgeting with monthly
updates allowing management to make
real-time assessments
•
Local management signs the Non-
Financial Letter of Representation to
annually certify the in-control position
in relation to the Code of Conduct,
Corporate policies, and other non-
financial requirements
•
Operational, health, safety, environmental,
quality, security and emergency
preparedness systems are in place at
each subsidiary
CORPORATE MANAGEMENT
•
Risk reporting, assessment, and mitigation
•
Compliance Framework
•
Identification of and capitalization on key
opportunities
•
Assessment of key market, financial,
regulatory, and technological
developments against strategy execution
•
Consolidated budget and forecasts are
used by management to evaluate KPIs,
investment strategy, and operations
•
Each quarter, Corporate management
monitors and assesses the consolidated
group risk profile comprising of strategic,
operational, financial, sustainability, and
compliance risks with the involvement of
key executives and corporate function
heads
•
Internal Audit & Risk facilitates and
supervises the risk management process,
compliance with OCI’s policies and
controls, and proactively advises on
further optimization of the internal control
system
•
Additional control leadership from other
corporate functions including Corporate
Technical and HSE, Compliance, Internal
Control, Legal, Tax, Strategic Planning,
and Group Controller
INTERNAL AUDIT & RISK
•
Independent and objective assurance
about the effectiveness of governance,
risk management, compliance, and
internal controls
•
Quarterly reporting by the Internal Audit &
Risk department to the Audit Committee
of the results from internal audits, status
of internal controls implementations,
OpCo risk assessments and Group
consolidated risk dashboard, highlighting
effectiveness of actions taken to mitigate
the risks, risk trends and the status of
risks and issues
•
Internal Audit & Risk performs periodic
independent internal audits of operating
and holding companies. Management is
consulted on performance developments
and gaps and remediation plans
•
Internal Audit & Risk maintains a central
repository for the monitoring of mitigating
actions and trends in relation to each
risk, and aides the Board in maintaining
objectivity in its risk assessments
•
The progress of audit action plans is
monitored by the Internal Audit & Risk
department, local internal control officers
and by local as well as Corporate senior
management
BOARD OVERSIGHT
•
Defines risk appetite and oversees risk
management
•
Delegates responsibility to the Executive
Directors and provides resources to
achieve the objectives of the organization
•
Oversees an independent IA function
•
Board of Directors is given a full financial
and operational update by the Executive
Directors at each Board meeting
•
Audit Committee (on behalf of the Board)
monitors and reviews the internal control
and risk management system and
provides guidance or investigates specific
topics as needed
•
The Board oversees the performance of
both the Internal Audit & Risk team and
the external auditor, and receives regular
updates and reports from both functions
Entity
Key responsibilitiesReview and reporting processes
RISK MANAGEMENT
Business performanceStrategy and value creation Financial statements Other information
Risk management and compliance
Corporate governanceSustainability
OCI N.V.
Annual Report 2020
80STRATEGIC
Description
Risks that may impede our ability to achieve
strategic objectives that we believe are critical
to our performance and growth. These are
risks that are considered strategic matters for
the Board and Executive Directors, and may
impact the company as a whole.
Risk appetite
As a leading player in our markets, we are able
to take certain calculated strategic risks that
create opportunities to maximize our ability to
deliver outstanding value to our stakeholders.
We take a measured approach to strategic risk
management with clear thresholds set by our
Board for required investment returns, market
risk appetite, growth capital expenditures, and
corporate actions.
OPERATIONAL
Description
Risks that may impede our ability to achieve
operational objectives and performance.
These risks can be internal or external, and
are typically directly managed and monitored
by the local management teams of each
operating company and supervised by our
Executive Directors.
Risk appetite
We aim to minimize operational risks while
maximizing our ability to capitalize on our
leadership positions in our markets. We strive
to maximize operational excellence at all
facilities while fostering a ‘safety first’ culture
across the organization with a zero-tolerance
approach to HSE risks.
FINANCIAL
Description
Risks related to financial, accounting, and
reporting controls and processes that
may impede our ability to meet financial
commitments, obligations, and daily operating
needs.
Risk appetite
We implement a financial strategy to maintain
an efficient balance sheet whilst securing good
access to financing with a view to deleverage
to 2x net debt through the cycle while
balancing our capital expenditure needs. Our
risk appetite and key policies are described
throughout the annual report.
REGULATORY
Description
Risks related to non-compliance with or
changes in laws and regulations, including
HSE, tax, and financial reporting, and other
legislation that may require changes in the way
we do business.
Risk appetite
We comply with applicable laws and
regulations everywhere we do business. All
employees are bound by our Compliance
Framework, which we are continuously
embedding throughout our organization. It is
in our core values to act with honesty, integrity
and fairness to foster a business climate that
maintains such standards.
Our key business risks with management’s assessment of each risk’s potential development
Our risk appetite is flexible to account for our diversified market presence and product portfolio and is tailored to four main categories. These categories tie into
our strategic priorities and aim to support our ability to mitigate against risks and protect OCI's ability to create long-term value.
Risk Risk Rating Description Risk management approach
POLITICAL RISK,
RISK OF UNILATERAL
SOVEREIGN ACTIONS,
AND MACROECONOMIC
CHANGES
OCI does business in both developed and emerging
markets, which means that we are exposed to some
countries where there is a risk of political or socioeconomic
instability, including the risk of adverse sovereign actions.
Accordingly, developments in any of the countries in
which we operate can create an uncertain environment
for investment and business activity and may adversely
impact our business. This includes certain partnerships and
joint ventures that involve various economic, operational,
and legal risks that are different from the risks involved in
owning facilities and operations independently.
We mitigate the impact of potential risks in any single market by diversifying our
presence, both in terms of sales destinations and the geographic locations of our
production facilities, which are in emerging and developed markets. Our run-rate
production capacity of 16.2 million metric tons is evenly split geographically, with 35% in
the USA, 24% in Europe, and 41% in the Middle East and North Africa. In addition, we
sell our products around the world, reaching 63 countries in 2020.
We actively monitor economic, political, and regulatory developments and maintain
positive relationships with various governmental bodies in the countries where we
operate as part of our effort to be a ‘local’ player in each of our markets and have
strategically partnered with sovereign-backed entities. Our legal team also works
diligently to monitor and review our practices and any changes in laws or regulations
in the countries where we operate to provide reasonable assurances that we remain in
line with all relevant laws. Management has also drafted contingency plans for various
unforeseen events and adverse scenarios.
RISK MANAGEMENT
Strategic Risks
ASSOCIATED STRATEGIC PRIORITIES
Commercial Strategy Business Optimization
Risk Rating
Risk decreasing Risk stable
Risk increasing
Business performanceStrategy and value creation Financial statements Other information
Risk management and compliance
Corporate governanceSustainability
OCI N.V.
Annual Report 2020
81
Risk Risk Rating Description Risk management approach
CLIMATE, ADVERSE
WEATHER CONDITIONS,
AND NATURAL
DISASTERS
Climate change and adverse weather conditions can
negatively impact field work and fertilizer application
seasons, which may affect the demand for our products.
Climate change also poses a global transition risk which
may result in changes to market dynamics, legislation, and
technology. Please refer to page 37 for a description of the
risks and opportunities presented by climate change.
Adverse weather conditions and natural disasters such
as hurricanes, health epidemics or pandemics (including
the current COVID-19 outbreak), and other extraordinary
events could result in property damage, loss of life,
production interruptions, and supply chain disruptions.
We have a balanced product split with no single product representing more than
approximately 34% of our capacity. Our products have inherently different industrial
dynamics, including different supply/demand drivers, seasonal cycles, customers,
competitors, and other factors that may affect prices and demand patterns. This
mitigates the risk of the impact of an individual product’s fluctuations and results in a
more stable revenue stream. We are also geographically diversified, reducing the risk
of local or regional weather events. Please refer to pages 39-40 for a description of
how we intend to reduce our environmental impact and contribute to achieving the
decarbonization goals set by the Paris Agreement.
In terms of natural disasters and pandemics, we have comprehensive emergency
preparedness systems in place that allow us to quickly react to extraordinary events,
and our assets have business interruption insurance policies in place that cover natural
disasters. For a description of how we are managing COVID-19, please refer to page 74.
RISK MANAGEMENT
Strategic Risks
continued
ASSOCIATED STRATEGIC PRIORITIES
Sustainability Operational Excellence
Risk Rating
Risk decreasing Risk stable
Risk increasing
Business performanceStrategy and value creation Financial statements Other information
Risk management and compliance
Corporate governanceSustainability
OCI N.V.
Annual Report 2020
82
Risk Risk Rating Description Risk management approach
CHANGES TO
CONDITIONS
AFFECTING OUR
MARKETS AND
COMMODITIES
Our products are global commodities with little or no
product differentiation, and supply-demand dynamics can
be affected by global trends such as dietary patterns and
population growth affecting demand for food, swings in
crop and agricultural prices, global production capacity
for our products, and the availability and pricing of the raw
materials required to produce our products – particularly
natural gas.
Our diversified product mix is exposed to a variety of cyclical and seasonal patterns
which mitigates the impact of an individual product’s fluctuations and results in a
more stable revenue stream. We continuously evaluate our price exposure and have
hedged our feedstock positions where appropriate based on our risk appetite and our
understanding of market factors. We also occupy a leading market position in many of
our products.
We have policies in place to respond to competitive factors and maintain mutually
beneficial relationships with our key customers to effectively compete and achieve
our business plans. We have global sales, marketing, distribution, and logistics
teams that work diligently to expand our sales channels, develop new and repeat
customer relationships, negotiate favorable contracts, and create market contacts by
attending various industry and trade conferences. In 2020, we further strengthened
our competitive position with the integration of Fertiglobe, which contributes 2.1 million
tons to our product portfolio, and provides enhanced logistical agility to better serve our
customers.
Our production and manufacturing teams also work diligently to ensure our plants
operate efficiently to produce high quality products that meet or exceed international
standards. Our products and processes are certified by global quality control institutions.
In terms of the availability and cost of our key feedstock – natural gas – we have
hedged our global exposure to natural gas price fluctuations through a mix of long-term
contracts in the United Arab Emirates, Egypt and Algeria, and spot prices in the United
States and the Netherlands, where we also take calculated hedge positions.
We continuously identify, implement, and sustain cost improvement plans, including
our outsourcing projects and those related to general overhead and workforce
rationalization.
RISK MANAGEMENT
Operational Risks
ASSOCIATED STRATEGIC PRIORITIES
Commercial Strategy Operational Excellence
Risk Rating
Risk decreasing Risk stable
Risk increasing
Business performanceStrategy and value creation Financial statements Other information
Risk management and compliance
Corporate governanceSustainability
OCI N.V.
Annual Report 2020
83
Risk Risk Rating Description Risk management approach
BUSINESS
INTERRUPTION
AND PRODUCTION
Our production facilities may experience unplanned
shutdowns or utilization rate reductions, which may result
in lost volumes and unplanned costs.
We have consistently invested in best-in-class technologies at all our facilities, which
maximizes reliability and efficiency. Our facilities are on average the youngest in the
industry with approximately 56% of our production capacity under ten years old, which
supports above average utilization rates and low maintenance costs. We have also
invested heavily in our older facilities to refurbish, debottleneck, and improve efficiency
and reliability.
We have a well-developed preventative maintenance system, including scheduled
maintenance turnarounds, frequent follow ups on action items from previous shutdowns,
and regular knowledge- sharing amongst all sites including comprehensive training
programs for our plant employees. We maintain adequate spare parts positions and
winterization procedures (where appropriate) as well as reliability initiatives where
required. Our plants have Business Continuity plans to respond to adverse events, and
for large and extended shutdowns, our plants have business interruption insurance.
HUMAN CAPITAL
We may face risks to our ability to employ, develop, and
retain talented employees is essential to maintain our high-
quality operations and management.
We have been able to attract, motivate and retain knowledgeable and experienced
employees thanks to our reputation and market position, our in-house training and talent
development programs, our Employee Incentive Plans (as described in note 21 of the
financial statements), as well as our strategic partnerships with industry leaders, which
offer employees exposure to high profile projects and advanced technologies.
We have instituted employee succession program for key positions across the group
to ensure effective knowledge transfer in support of the continuity of our business
operations.
RISK MANAGEMENT
Operational Risks
continued
ASSOCIATED STRATEGIC PRIORITIES
Maximizing free cash flow Operational Excellence
Risk Rating
Risk decreasing Risk stable
Risk increasing
Business performanceStrategy and value creation Financial statements Other information
Risk management and compliance
Corporate governanceSustainability
OCI N.V.
Annual Report 2020
84
Risk Risk Rating Description Risk management approach
CAPITAL STRUCTURE,
ALLOCATION, AND
CURRENCY
FLUCTUATIONS
Our ability to deploy and raise capital effectively can impact
our ability to achieve our strategic priorities or capitalize
on business opportunities. Although we strive to ensure
that adequate levels of working capital and liquidity are
maintained, unfavorable financial market conditions may
adversely affect our financing costs, hinder our ability
to achieve additional financing, and/or hinder our ability
to refinance existing debt. This could therefore have an
adverse impact on our business prospects, earnings and/
or our financial position.
In addition, a substantial portion of our consolidated
revenue, operating expenses and long-term debt is
denominated in foreign currencies. Significant changes in
the exchange rates of certain operational currencies, such
as the US Dollar, the Euro, and the Algerian Dinar, can have
a material effect on our financial performance.
We have a robust capital allocation strategy that aligns to our strategic priorities, with the
governance and decision-making measures in place to balance opportunities and risks.
We strive to maintain a strong financial position and creditworthiness with our creditors.
We closely monitor our cash position and credit lines to ensure our financial flexibility.
We have also diversified our funding sources to avoid dependence on a single market,
staggered our debt maturity profile to reduce repayment burdens and have implemented
other working capital improvement programs. OCI has robust in-house financing
expertise and a proven track record in both refinancing debt and accessing new funding.
We hedge our foreign exchange cash flow risk on a consolidated basis by matching our
foreign currency- denominated liabilities with continuing sources of foreign currencies.
CYBERSECURITY
Despite our IT security measures, our information
technology and infrastructure may be vulnerable to cyber-
attacks or breaches. Any such breach could result in
business disruption or compromise our systems and result
in downtime or leak of personal and/or business sensitive
data adversely affecting our reputation.
We continuously implement up-to-date security procedures and measures to strengthen
our security posture and minimize our vulnerabilities to cyber-attacks. We believe these
measures and procedures are appropriate.
Our IT team is focused on the monitoring and enhancement of our IT security capabilities
across the group for both our IT infrastructures and plant process control systems. In
addition, we invest in internal resources and engage with external security experts to
support the implementation of various action plans that are part of our comprehensive
cyber security management system.
Throughout the year, we run several internal and external security assessments across
the group to ensure that our risk levels are appropriate. We also maintain a group wide
cyber insurance program as last line of defense in case of adverse incidents. Additionally,
we regularly run IT audits and security assessments to ensure the continuous
effectiveness of our security measures.
RISK MANAGEMENT
Financial Risks
ASSOCIATED STRATEGIC PRIORITIES
Maximizing free cash flow Business Optimization
Risk Rating
Risk decreasing Risk stable
Risk increasing
Business performanceStrategy and value creation Financial statements Other information
Risk management and compliance
Corporate governanceSustainability
OCI N.V.
Annual Report 2020
85
ASSOCIATED STRATEGIC PRIORITIES
Sustainability Operational Excellence
Risk Risk Rating Description Risk management approach
CHANGES IN
REGULATORY
CONDITIONS IN THE
MARKETS IN WHICH
WE OPERATE
Changes in laws, regulations and the related interpretations
may alter the environment in which we do business. This
includes changes in health and safety, competition and
product-related laws and regulations, as well as changes
in accounting standards and taxation requirements. This
also includes the impact of proposed climate change
related regulations at both the international and national
levels, such as the EU’s proposed carbon dioxide reduction
targets, and more intensified or burdensome tax regulation
and tax controversy challenges to curb budget shortfalls
resulting from the negative economic impact of the
COVID-19 pandemic.
Failure to comply with these laws may result in substantial
fines, penalties, or other sanctions such as the obligation
to invest in newer equipment, permit revocations or facility
shutdowns. Consequently, we may experience delays
in obtaining or be unable to obtain required permits,
which may delay or interrupt our operations. In addition,
global geopolitics have created uncertainty around tariff
implementation in key markets (particularly in the US, EU,
and China), which may affect product or feedstock pricing.
Our ability to manage regulatory, tax and legal matters and
to resolve pending matters within current estimates may
impact our results.
We actively monitor regulatory developments to ensure we comply with the laws and
regulations of the countries where we operate, including climate and HSE legislation
to maintain our licenses to operate. Additionally, we actively provide comments and
feedback regarding proposed or draft rules when given the opportunity, specifically when
draft rules are open for public comments.
As a result of the Paris Climate Agreement and the European Union’s announced carbon
dioxide emissions reductions targets, our Dutch operations are part of a group of
companies engaged in the ongoing dialogue with Dutch government regarding proposed
new carbon dioxide emissions regulations and additional taxes. We are also engaged
in ongoing lobbying on the national and European Union levels to enhance cooperation
and transparency between regulators and our industries.
We have also committed to reducing our greenhouse gas emissions to reduce our
environmental impact and contribute to achieving the decarbonization goals set by the
Paris Agreement. Please refer to pages 39-40 for more information.
We continue to monitor closely and maintain flexibility to change trade flows and
accommodate tariffs and continue to monitor regulatory developments and develop
targeted action plans as part of our Group Compliance Framework.
ABILITY TO MAINTAIN
OUR HEALTH, SAFETY
AND ENVIRONMENT
(HSE) STANDARDS
HSE is a vital aspect across the group. We have a deep
commitment to maintaining our strong HSE track record.
Despite the nature of our businesses, we aim to prevent
every accident through stringent HSE rules, standards, and
training programs.
We implement strict HSE training and operating discipline at every plant to minimize
HSE risks, and we closely monitor our plants through regular management site visits
and HSE audits, in addition to comprehensive knowledge sharing across the group.
Our safety and emissions records meet or exceed international standards, underscoring
our commitment to providing our employees with a safe, secure, and environmentally
conscious workplace.
In addition, the HSE Committee supervises our HSE activities, as described in the HSE
Committee report.
Risk Rating
Risk decreasing Risk stable
Risk increasing
RISK MANAGEMENT
Regulatory Risks
Business performanceStrategy and value creation Financial statements Other information
Risk management and compliance
Corporate governanceSustainability
OCI N.V.
Annual Report 2020
86
COMPLIANCE
OCI strives to conduct all business activities responsibly, transparently, and with integrity
and respect towards all stakeholders. These values underpin everything we do and form the
framework which defines the day-to-day attitudes and behaviour of our employees.
Our approach
To make those values clear and provide clear ground rules for how we do business, our
Compliance Framework consists of policies that describe in specific terms what we stand for as
a company and the conduct required in the workplace, in how we deal with business partners,
serve our customers, and the broader responsibilities we have to the communities in which we
work and live. The Compliance Framework also sets out rules on important topics such as the
prohibition of bribery, dealing with confidential information and conflicts of interest, competition
law, third-party due diligence, the importance of accurate record keeping and reporting, and
explains the possibility of disciplinary measures when in breach of the framework.
All employees are trained on the key principles and applications of the Compliance Framework
through a group-wide e-learning platform and can raise any concerns and breaches through a
safe and confidential whistleblowing and incident reporting procedure. An anonymous reporting
procedure is also available, through which employees can report to a whistleblower hotline hosted
by a third-party hotline provider. All reports are handled with the utmost care and confidentiality,
regardless of if reported internally or via the anonymous reporting hotline.
The majority of employees eligible or included in the various programs successfully completed
their training. Moving forward, we will continue to raise awareness of compliance and train
employees in relevant policies and procedures.
Our compliance program
The Chief Legal and Human Capital Officer (CLHCO) is the Executive Director responsible for
ethics and compliance. The Group Compliance Officer, in close collaboration with the CLHCO and
the rest of the Board of Directors, implements our group Compliance Program and ensures that
our Compliance Framework remains in line with applicable regulations and is properly applied.
The Integrity Committee, comprising of the CFO, the CLHCO, and the Group Compliance Officer,
handles incidents of a severe nature. The Integrity Committee did not meet in 2020, as no incident
of a (potential) severe nature was reported.
Management of Operating Companies and staff departments are responsible and accountable
for raising compliance awareness within their respective businesses and departments and are
supported by a Local Compliance Officer who reports on alleged breaches and compliance
incidents to both operating company management and to corporate leadership. Additionally, the
Audit Committee receives a Quarterly Compliance Report.
At the start of every year the Group Compliance Officer, in collaboration with operating company
management, sets the annual compliance agenda. The agenda consists of continuous and new
compliance activities and requirements, to ensure growth in maturity of the Compliance Program.
These activities and requirements are concrete and measurable, and are reported internally on a
quarterly basis, and can be tested on their effectiveness. Through this annual agenda, compliance
controls are continuously developed and enhanced for effectiveness.
In 2020, amongst others, the following compliance requirements and activities were achieved:
• Training and awareness sessions on various compliance topics, among which competition law,
gifts & entertainment, conflict of interest, and diversity and inclusion
• Development and implementation of a process for compliance risk mapping and setting the
standard for the group’s risk appetite
• Successful implementation of the third-party due diligence software and enhancement of the
related screening procedure
• Implementation of a new whistleblowing hotline, including an incident management system
• Development and implementation of a tailor-made compliance framework for Fertiglobe and its
operational companies
At the end of the year, the CEO and CFO of each operating company sign the Non-Financial
Letter of Representation (NF LoR) to confirm compliance with the Code of Conduct and other
corporate non-financial requirements. The outcome is reviewed by the CFO, CLHCO, the Group
Compliance Officer and the Director Internal Audit & Risk and the results are reported to the
Audit Committee and the Board of Directors. Reported outstanding actions are followed up on
by the Internal Audit department and monitored in quarterly reviews. The outcome of the NF
LoR process, in combination with the internal control self- assessments, the HSE reports, the
Compliance reports, the risk assessments and the performed internal audits, establishes the basis
for the In Control Statement of the Board of Directors in this Report.
During 2020, we received 9 incident notifications. All incidents were investigated, with no
substantial cases found. There were no violations of applicable laws in 2020.
Privacy
and data
policy
Code of
Conduct
Whistle-blower
policy
Insider Trading
& Market
Abuse policy
Sanctions
Policy
Human
Rights
Policy
Applicable
laws and
regulations
Anti-bribery
and Corruption
policy
Competition
policy
Business
Partner Code of
Conduct
COMPLIANCE
FRAMEWORK
Business performanceStrategy and value creation Financial statements Other information
Risk management and compliance
Corporate governanceSustainability
OCI N.V.
Annual Report 2020
87
We promote sustainable agriculture and nutrient stewardship through our supply chain,
which begins with sourcing natural gas and ends at our agricultural and industrial
customers. We work diligently to ensure every aspect of our business operates optimally
and promote best practices through our
Business Partner Code of Conduct
.
Our governance and compliance policies and expectations of ethical business practices
extend beyond our operations throughout our supply chain through our Business Partner Code
of Conduct.
We seek to award business to suppliers and business partners with whom OCI has a supplier
relationship (collectively, Business Partners) who are committed to act fairly and with integrity
towards their stakeholders, who have adopted and promote the implementation of strong
business principles, and who observe the applicable laws of the country in which they operate.
We hold every Business Partner to the same level of accountability, transparency, and
respectability as we do ourselves to ensure our entire value chain secures the salient rights of
every individual.
Business Partner Code of Conduct
Our Business Partner Code of Conduct summarizes the values and expectations we require all
Business Partners to adhere to and aligns to international laws and standards on ethics, labor, and
human rights such as those set out by the International Labor Organization (ILO) and the United
Nations International Children's Emergency Fund (UNICEF), the United Nations Guiding Principles
on Business and Human Rights, and others.
Screening and due diligence
Based on the company’s Sanctions Policy, a screening of all Business Partners performed when
considering Business Partners. Via a compliance software tool, we conduct customary due
diligence including a screening of the Business Partner against sanction lists and compliance
databases, on environmental performance, labour practices, and human rights performance. We
also check if any adverse media coverage in relation to the Business Partner exists, including if
the future Business Partner has been involved in other unethical or illegal conduct. In addition,
all existing Business Partners are continuously monitored via this software tool. It is the Business
Partner's responsibility to maintain and enforce compliance within its supply chain. Key Business
Partners undergo more in-depth screening as part of our due diligence process.
The effectiveness of our Business Partner screening processes is evaluated by the compliance
team and the internal audit team as part of their regular compliance and audit cycles, which also
includes Business Partner audits as part of contractual arrangements.
Reporting Business Partner misconduct
We provide a clear reporting mechanism for suspected Business Partner misconduct through our
whistleblowing platform, which includes an anonymous reporting procedure via a hotline hosted
by a third-party hotline provider. More information is available in the Business Partner Code of
Conduct and on our website.
COMPLIANCE
Our Code of Conduct
extends
across our supply chain
Business Partners
across our business
partner chain
Business Partner audits
conducted as part of
contractual arrangements
of Business Partners
are required to adhere
to Business Partner
Code of Conduct
REGULAR
Business performanceStrategy and value creation Financial statements Other information
Risk management and compliance
Corporate governanceSustainability
OCI N.V.
Annual Report 2020
88
90 Co-Chair's introduction
91 Board profile
95 Board report
104 Remuneration report
117 Declarations
Corporate
governance
OCI N.V.
Annual Report 2020
89OCI N.V.
Annual Report 2020
89
The exceptional events of 2020 emphasized the importance
of robust governance for the effective management of our
business. I am impressed by the way OCI N.V. (OCI or
Company) navigated the year’s challenges and congratulate
every employee for their perseverance and resourcefulness to
deliver strong performance for OCI and its group companies
(Group), despite the year’s unusual working conditions and
personal stress.
During the year, the Board of Directors (Board) oversaw several
initiatives that we believe have allowed OCI to achieve strong
cohesion and develop a clear purpose.
Strategically, we mandated the executive directors
(Executive Directors) to further develop OCI’s commitment to
decarbonization through the development and implementation
of our recently announced environmental and social targets
and sustainability strategy. We also reaffirmed this commitment
by establishing the HSE & Sustainability Committee to provide
dedicated guidance on the subject and aligned the Executive
Directors’ long-term compensation to a basket of environmental,
social, and governance (ESG) metrics.
Culturally, we oversaw the launch of the OneOCI platform, which
we are pleased to see was instrumental in helping develop a
unified community throughout the Group despite the physical
separation caused by COVID-19. We also oversaw the launch
of a Groupwide diversity and inclusion program, which includes
a target to increase the representation of women in senior
leadership to 25% by 2025.
We also guided the Group through changes to OCI’s leadership.
During the year, Mr. Nassef Sawiris was appointed Executive
Chair, allowing him to focus on directing OCI’s strategy and
long-term value creation. Mr. Ahmed El-Hoshy succeeded Mr.
Nassef Sawiris as Chief Executive Officer and was appointed
to the Board. Having worked with the OCI leadership team for
many years in my capacity as Co-Chair, I believe OCI is led
by a formidable team that is best suited to drive the business
forward.
In addition, we welcomed Ms. Heike van de Kerkhof as a
non-executive director (Non-Executive Director). Ms. Heike
van de Kerkhof brings a wealth of expertise in sustainability
to the Board, which is particularly timely given the Group’s
commitment to decarbonization.
For the year ended 31 December 2020, the Board reports the
following:
• The Board has reviewed and discussed the audited financial
statements for the year 2020.
• The Board discussed with the external auditor the outcome
of their performed audits in accordance with International
Standards on Auditing.
• The Board has received written confirmation of the external
auditor’s independence.
• Based on the review and discussions referred to above, the
Board has approved that the audited consolidated and parent
company financial statements be included in the 2020 Annual
Report (Annual Report).
The Board recommends that the General Meeting of
Shareholders (GM) adopts the 2020 financial statements
included in this Annual Report and looks forward to overseeing
continued excellence in every aspect in 2021.
MICHAEL BENNETT
CO-CHAIR
I congratulate every
employee for their
perseverance and
resourcefulness
to deliver strong
performance for
OCI and its group
companies
CO-CHAIR'S
INTRODUCTION
Business performanceStrategy and value creation Risk management and compliance Other information
Corporate governance
Financial statementsSustainability
OCI N.V.
Annual Report 2020
90
Michael Bennett Nassef Sawiris Ahmed El-Hoshy Hassan Badrawi Maud de Vries
Co-Chair and Senior Independent
Non-Executive Director
Executive Chair Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Legal and Human
Capital Officer (CLHCO)
Year of birth
1953 1961 1984 1976
1972
Gender
Male Male Male Male Female
Nationality
American Egyptian/Belgian Egyptian/American Egyptian/British Dutch
Initial
appointment date
January 2013 January 2013 June 2020 May 2018 June 2019
Date of last
re-appointment
June 2020 June 2020 - June 2020 June 2020
End of current term
2023 2024 2024 2024 2024
Ordinary shares
owned
23,500 69,374,747 60,928 129,601 10,647
Committee
membership
1
N&R - - - -
Attendance
at Board and
Committee
meetings
2
BoD (6/6)
N&R (8/8)
BoD (6/6) BoD (3/3) BoD (6/6) BoD (6/6)
Current external
appointments
• Director Morningside College
• Please see the summary of skills
and experience on page 94
• Supervisory Director Adidas AG
• Chairman and CEO of Avanti
Acquisition Corp.
• Executive chairman of Aston Villa FC
Member of the:
• J.P. Morgan International Council
• Cleveland Clinic’s International
Leadership Board Executive
Committee
• University of Chicago’s Board of
Trustee
• Exor N.V. Partners Council
• Council on Foreign Relations
Global Board of Advisors
• Please see the summary of skills
and experience on page 94
Please see the summary of skills and
experience on page 94
Risk management and for further
experience please see the summary
of skills and experience on page 94
• EVP HR NNS Luxembourg S.à r.l.
• Please see the summary of skills
and experience on page 94
BOARD PROFILE
1
Board and Committees: BoD: Board of Directors, AC: Audit Committee, HSE: Health, Safety and Environment & Sustainability Committee and N&R: Nomination and Remuneration Committee
2
The attendance at board and committee meetings is pro-rated to the term of the individuals Board and Committee membership during the year
Business performanceStrategy and value creation Risk management and compliance Other information
Corporate governance
Financial statementsSustainability
OCI N.V.
Annual Report 2020
91
Sipko Schat Jérôme Guiraud Robert Jan van de Kraats Gregory Heckman
Vice-Chair and Independent
Non-Executive Director
Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director
Year of birth
1960 1961 1960 1962
Gender
Male Male Male Male
Nationality
Dutch French Dutch American
Initial
appointment date
December 2013 June 2014 June 2014 June 2015
Date of last
re-appointment
June 2020 June 2020 June 2020 June 2020
End of current term
2024 2024 2024 2024
Ordinary shares
owned
5,000 180,190 3,725 40,000
Committee
membership
1
AC, N&R (chair) AC, N&R AC (chair), N&R HSE
Attendance
at Board and
Committee
meetings
2
BoD (6/6)
AC (5/5)
N&R (8/8)
BoD (6/6)
AC (5/5)
N&R (8/8)
BoD (6/6)
AC (5/5)
N&R (8/8)
BoD (6/6)
HSE (4/4)
Current external
appointments
• Member Supervisory Board:
• Rothschild & Co.
• Rothschild Bank A.G.
• Trafigura Group Pte Ltd
• Drienim B.V.
• Director Randstad Beheer B.V.
• Please see the summary of skills and
experience on page 94
• CEO NNS Luxembourg S.à r.l.
• Co-CEO NNS Advisers Ltd
• Non-Executive Director and Chairman
Orascom Construction Plc
• Non-Executive Director BESIX Group
• Director various NNS Group entities and OS
Luxembourg S.à r.l.
• Please see the summary of skills and
experience on page 94
• Non-Executive Director VEON Ltd.
(Chairman of the Audit and Risk Committee)
• Non-Executive Chairman TMF Group
• Supervisory Board Member Royal Schiphol
Group N.V.
• Director Randstad Beheer B.V.
• Member advisory board SUITSUPPLY
• Advisor to the Supervisory Board HEMA
B.V.
3
• Risk management and for further experience
please see the summary of skills and
experience on page 94
• Member of the board and CEO Bunge Ltd
• Member Rabobank North America
Agribusiness Advisory Board
• Member NYSE Board Advisory Council
• Member Board of Governors for the
AKSARBEN Foundation
• Member of University of Illinois Division of
Intercollegiate Athletics Campaign Steering
Committee
• Please see the summary of skills and
experience on page 94
BOARD PROFILE
CONTINUED
1
Board and Committees: BoD: Board of Directors, AC: Audit Committee, HSE: Health, Safety and Environment & Sustainability Committee and N&R: Nomination and Remuneration Committee
2
The attendance at board and committee meetings is pro-rated to the term of the individuals Board and Committee membership during the year
Business performanceStrategy and value creation Risk management and compliance Other information
Corporate governance
Financial statementsSustainability
OCI N.V.
Annual Report 2020
92
Anja Montijn-Groenewoud David Welch Dod Fraser Heike van de Kerkhof
Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Directo
r
Year of birth
1962 1953 1950 1962
Gender
Female Male Male Female
Nationality
Dutch American American German
Initial
appointment date
June 2016 May 2019 May 2019 October 2020
Date of (last)
re-appointment
June 2020 June 2020 June 2020 -
End of current term
2024 2024 2024 2024
Ordinary shares
owned
- - 4,000 -
Committee
membership
1
HSE (chair), N&RC HSE AC HSE
Attendance
at Board and
Committee
meetings
2
BoD (5/6)
HSE (4/4)
N&R (7/8)
BoD (6/6)
HSE (4/4)
BoD (5/6)
AC (5/5)
BoD (1/1)
HSE (1/1)
Current external
appointments
• Member of the Supervisory Board
of Fugro N.V.
• Member of the Board VEUO (a
representative organization of listed
companies which looks after the interest of
companies listed at Euronext Amsterdam)
• Please see the summary of skills and
experience on page 94
• Member of the Council on Foreign Relations
and the American Academy of Diplomacy
• Please see the summary of skills and
experience on page 94
• Independent Director
Subsea 7 S.A.
• Non-Executive Chairman Rayonier Inc.
• Member of the Board of Fleet Topco
Limited, the private holding company of
Argus Media Ltd.
• Please see the summary of skills and
experience on page 94
• Chief Executive Officer and Member
of the Board of Directors at Archroma
• Non-Executive Director at Venator
Materials PLC
• Please see the summary of skills and
experience on page 94
BOARD PROFILE
CONTINUED
1
Board and Committees: BoD: Board of Directors, AC: Audit Committee, HSE: Health, Safety and Environment & Sustainability Committee and N&R: Nomination and Remuneration Committee
2
The attendance at board and committee meetings is pro-rated to the term of the individuals Board and Committee membership during the year
Business performanceStrategy and value creation Risk management and compliance Other information
Corporate governance
Financial statementsSustainability
OCI N.V.
Annual Report 2020
93
M. Bennett N. Sawiris A. El-Hoshy H. Badrawi M. de Vries S. Schat J. Guiraud
R.J. van
de Kraats G. Heckman A. Montijn D. Welch D. Fraser
H. van de
Kerkhof
Independent
• • • • • •
•
•International business
experience
• • • • • • • • • • • • •
Commercial/Marketing
• •
•
• •
HSE
• • • • • • •
Strategic management
• • • • • • • • • • • • •
Financial expertise: banking
• • •
• •
Financial expertise:
accounting
•
• • •
Nitrogen/Methanol
experience
• • • •
Emerging Markets
experience
• • • • • • • • • • • •
Tax/Legal/Compliance
• • • • •
HR & executive
compensation
•
•
•
•• •
•Risk management / Internal
Control & Audit
• • • • •
• •
Government/Regulatory
knowledge
•
• • •
•
•Sustainability
• • • • • • •
•
• •
Change management /
Business consolidation
• • • • •
•
• • • • • • •
Technology / IT • • • • •
BOARD SUMMARY OF
SKILLS AND EXPERIENCE
Business performanceStrategy and value creation Risk management and compliance Other information
Corporate governance
Financial statementsSustainability
OCI N.V.
Annual Report 2020
94
OCI is a public limited liability company (
naamloze vennootschap
) established under the laws of the Netherlands, with its official seat in Amsterdam, the Netherlands.
Governance framework
Introduction
OCI is committed to the principles of good corporate governance. The Board believes that good
corporate governance practices align the interests of all stakeholders by having structures in
place that ensure the business is managed with integrity and efficiency, thereby maximizing the
profitability and long-term value creation of the Company.
OCI's strategic priorities as described on pages 6-19 aim to deliver long-term value creation
for the Company and its stakeholders. These priorities are supported by the Board and are
underpinned by OCI’s commitment to invest in products that help achieve OCI's purpose of
cultivating a sustainable world through cleaner fuel solutions, lower carbon feedstocks,
and global food security
. Please refer to the Strategy and value creation section of this Annual
Report for the Board’s view on OCI's strategy and its implementation.
Organizational and corporate structure
OCI is organized by its two primary functional segments, nitrogen and methanol.
The Board sets the strategic mandate with operational, financial, and sustainability goals relayed
to management.
The Executive Directors manage the achievement of these goals and the day-to-day operations.
In executing the goals, the Executive Directors are supported by several corporate functions. In
addition, each principal subsidiary is led by a general manager and a finance director who report
to the Executive Directors.
Governance structure
OCI has designed its corporate governance structure in compliance with its articles of association,
by-laws, the requirements of the Dutch civil code, the Dutch corporate governance code (Code),
the applicable securities laws, rules and regulations of the Amsterdam stock exchange and
international best practices. All governance and compliance policies and procedures are available
on our website under
Corporate Governance
.Shareholders
Articles of Association – By-laws
Board (one-tier)
Articles of Association – By-laws –
Board profile – Board Rotation Schedule –
Board D&I Policy – Reserved Matters – Code
of Conduct – Related Party Transactions
Policy – Insider Trading Code
Audit Committee
HSE & Sustainability
Committee
Nomination and
Remuneration
Committee
Terms of reference Terms of reference Terms of reference
Executive Directors
Operating company management
Local laws and regulations
Code of Conduct
Insider Trading Code
Business Partner Code of Conduct
Diversity and Inclusion Policy
Anti Bribery and Corruption Policy
Human Rights Policy
Whistleblower Policy
Sanctions Policy
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Annual Report 2020
95
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The Board of Directors
OCI is managed by a one-tier Board comprised of Executive Directors and Non-Executive
Directors. The Board maintains three committees as part of its supervisory role: the Audit
Committee, the Nomination and Remuneration Committee and the HSE & Sustainability
Committee (Committees).
The Board is collectively responsible for OCI’s management and strategy. The Board promotes a
culture of openness and accountability within the Board and throughout the entire organization.
The tasks, responsibilities and procedures of the Board are set out in OCI’s by-laws, which are
available on OCI’s website.
The Board has delegated the operational management of the business to the Executive Directors,
apart from certain reserved matters as set out in such Board resolution, OCI’s articles of
association and by-laws.
The Board is authorized to represent OCI. In addition, the Co-Chair of the Board and each
Executive Director are authorized to solely represent OCI.
Executive Directors
The Executive Directors are charged with the day-to-day management of OCI. They are
responsible for the continuity of OCI, the optimization of its business, and creating a culture that
contributes to long-term sustainable value creation for stakeholders. Each Executive Director has
an individual responsibility for certain business segments, functional areas, projects and tasks.
Our strategic priorities include operational excellence, global commercial strategy, sustainable
solutions, decarbonization, and maximizing free cash flow.
During 2020, the Board was composed of the following three Executive Directors: Mr. Nassef
Sawiris (CEO), Mr. Hassan Badrawi (CFO) and Ms. Maud de Vries (CLHCO). Mr. Ahmed El-Hoshy
was appointed to the Board at the 2020 AGM as Executive Director, thereby bringing the total
number of Executive Directors to four. Mr. Ahmed El-Hoshy assumed the role of CEO from Mr.
Nassef Sawiris per 1 August 2020. Mr. Nassef Sawiris became the Executive Chair of the Board
as per that same date. The Executive Chair is, amongst others, responsible for determining the
strategy of the Group and providing guidance to the other Executive Directors.
Non-Executive Directors
The role of the Non-Executive Directors is essentially supervisory in nature. The Non-Executive
Directors supervise, amongst others, the interests of the stakeholders, fostering a culture aimed at
long-term value creation, the operational, financial and sustainability goals, the establishment and
maintenance of internal procedures to ensure that all relevant information is known to the Board in
a timely fashion, and shareholder engagement.
During 2020, the Board was composed of nine Non-Executive Directors: Mr. Michael Bennett,
Mr. Jan Ter Wisch, Mr. Sipko Schat, Mr. Jérôme Guiraud, Mr. Robert Jan van de Kraats, Mr.
Gregory Heckman, Ms. Anja Montijn-Groenewoud, Mr. David Welch and Mr. Dod Fraser. The
appointment of Mr. Jan Ter Wisch as Independent Non-Executive Director and Vice-Chair of the
Board ended at the AGM. Ms. Heike van de Kerkhof was appointed to the Board as Independent
Non- Executive Director at the Extraordinary General Meeting of Shareholders (EGM) on 20
October 2020, bringing the total number of Non-Executive Directors back to nine, and bringing
knowledge and experience in sustainability to the Board. As of 1 August 2020, Mr. Michael
Bennett became Co-Chair and Senior Independent Non-Executive Director and Mr. Sipko Schat
became Vice-Chair and Independent Non-Executive Director.
The Co-Chair is primarily responsible for the functioning of the Board and its Committees.
Together with the Company Secretary, the Co-Chair sets the agenda for Board meetings and
leads an induction program for new Directors tailored to their respective needs. The Vice-Chair
acts as the contact for shareholders and other stakeholders of the Company with respect to
concerns which have not been resolved through the normal channels of the Co-Chair, the
Executive Chair or the other Executive Directors.
Appointment of Directors
The GM can appoint, suspend or dismiss an Executive Director or a Non-Executive Director by an
absolute majority of the votes cast upon a proposal of the Board.
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2020 Board and Committee meetings
The table below summarizes how the duties of the Board and the Committees were carried out during 2020, including the focus topics that were reviewed, discussed and advised on.
Board Audit Committee Nomination and Remuneration Committee HSE & Sustainability Committee
General
The Board focused on matters contributing to medium
and long-term value creation and continues to be involved
in shaping the strategy through regular discussions and
focus on supervising medium to long term strategic
targets aligned with OCI’s vision. The Board maintains
three committees as part of its supervisory role, these
committees are Non-Executive committees.
The Chair met with the internal and external auditor in
advance of every Audit Committee meeting to secure that
all relevant issues were sufficiently addressed. The external
auditor attended all Audit Committee meetings in 2020 and
was able to meet with the Audit Committee without the
presence of management in each meeting.
More information on the remuneration policy and the 2020
remuneration review can be found in the Remuneration
Report beginning on page 104.
More information on HSE and sustainability can be found
in the sustainability section beginning page 29.
Tasks,
responsibilities
and procedures
Set out in the Set out in the
by-laws
Terms of Reference of the
Audit Committee
Set out in the
Terms of Reference of the
Nomination and Remuneration Committee
Set out in the
Terms of Reference of the
HSE & Sustainability Committee
Number of
Members
13 Directors Four Non-Executive Directors.
Mr. Robert Jan van de Kraats is the Chair given his
competence in accounting and auditing as per section 2(3)
of the Audit Committee Decree 2016
Five Non-Executive Directors.
Mr. Sipko Schat is the Chair
Four Non-Executive Directors.
Ms. Anja Montijn-Groenewoud is the Chair
Number of
Meetings held
Six Five Eight Four
Focus topics
• Medium and long term strategy
• COVID-19
• HSE
• ESG and sustainability and regulatory environment
(Climate Agreement in the Netherlands, Dutch Carbon
Tax and impact on the Dutch businesses viability)
• Virtual Board and Committee meetings, AGM and EGM
• Net debt reduction
• Refinancing strategy
• Debt capital structure optimization
• Sales and inventories strategy / market developments
• Operational performance and cost control
• Succession planning
• Organizational design and management development
• Composition of the Board and Committees and Board
structure
• Internal controls
• Natural gas risk management
• Hedging policy and risk framework
• Cybersecurity
• Related party transactions
• Evaluation Risk Management and Internal Controls
including the key risks facing the Group
• Evaluation of ESMA guidance and focus, priorities and
risk management in relation to COVID-19
• Implementation of a Group Delegation of Authority
• IT and IT (cyber) security
• In-control statement and underlying in-control situation
• Evaluation Related Party Transactions and
implementation of Related Party Transactions Policy
• Tax review and policy
• Refinancing
• Governance and stand-alone functioning of Fertiglobe
• Evaluation Group’s Compliance Framework and
effectiveness
• Evaluation year-end closing process
• Litigation
• Assessment of the functioning of the external auditor,
its appointment, including scope, risk assessment and
materiality
• Strategy and ERP
• Internal Audit Plan
• Remuneration cycle and policy review
• HR roadmap: succession planning and talent
management and development
• Strengthening key positions in the internal organization
• Evaluation Board profile and composition including
diversity and inclusion
• Overseeing the governance changes (reappointment
of 11 Board members, appointment of two new Board
members in functions and titles)
• Fertiglobe governance and stand-alone functioning
• Ensuring compliance of Remuneration Policy with EU
Shareholders Rights Directive II
• Evaluation of the 2019 targets for the Executive Directors
• Setting 2020 targets for the Executives
• Reviewed and advised on the executive compensation
• Reviewed and advised on the benefit plans and
short-term and long-term incentive programs of the
Executive Directors
• 2020 HSE strategy and performance
• 2021 HSE plan and 2021 target setting
• HSE audit schedule and quality and outcome of the
HSE audits
• Climate Agreement in the Netherlands
• Energy and environmental developments
• Safety Award
• Fertil (Abu Dhabi) site visit
• Oversight of the Company’s strategy, policies and
initiatives relating to sustainability matters (linked to OCI’s
overall strategy)
• Monitor and periodically discuss the Company’s
sustainability goals, targets, risk management and
objectives and the progress made in these areas
• Review of the Company’s sustainability disclosures
in the annual report, as well as any periodic disclosures
on sustainability
Strategic
targets
The Board’s strategic targets are focused on guiding and supervising the company’s journey to achieving its commitment to sustainable value creation by focusing on its strategic priorities of operational excellence, business optimization, a
global commercial strategy, sustainability, and maximizing free cash flow to achieve 2.0x net leverage through the cycle.
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97
Board rotation schedule
During the AGM, OCI has implemented the standard appointment terms under the Code (four
years for Executive Directors and two times four years with possible extensions of two times two
years for Non-Executive Directors) to facilitate that the Directors can focus on long-term value
creation in the performance of their work. It furthermore enables the Executive Directors to ensure
continuity in the Company's management and strategy and enables the Non-Executive Directors
to further ensure continuity in their supervision of the Company's strategy.
The reappointment of Mr. Michael Bennett, Mr. Jérôme Guiraud, Mr. Gregory Heckman, Mr.
Robert Jan van de Kraats and Mr. Sipko Schat resulted in an aggregate term of appointment of
more than eight years. The Board has duly considered this and concluded that their invaluable
experience and knowledge of the Company’s operations as well as the industries justified such
reappointments.
OCI’s rotation schedule as included in the table below aims to avoid, as far as possible, a situation
in which Directors retire at the same time.
Name
Date of first
appointment
End of
current term
Final retirement
(max. 8 (12) years)
Nassef Sawiris 16 Jan 2013 2024 None
Ahmed El-Hoshy 17 June 2020 2024 None
Hassan Badrawi 24 May 2018 2024 None
Maud de Vries 1 Jun 2019 2024 None
Michael Bennett 25 Jan 2013 2023 2021(25)
Sipko Schat 9 Dec 2013 2024 2022(26)
Jérôme Guiraud 26 Jun 2014 2024 2022(26)
Robert Jan van de Kraats 26 Jun 2014 2024 2022(26)
Gregory Heckman 10 Jun 2015 2024 2023(27)
Anja Montijn-Groenewoud 28 Jun 2016 2024 2024(28)
David Welch 29 May 2019 2024 2027(31)
Dod Fraser 29 May 2019 2024 2027(31)
Heike van de Kerkhof 20 October 2020 2024 2028(32)
Board composition and independence
The composition of the Board strives to arm OCI with leadership that is diverse in skills,
experience, gender and background, thereby maximizing the Board’s ability to independently
and critically act without emphasis on particular interests. The Board maintains independence
by ensuring the majority of the Non-Executive Directors including the Co-Chair are independent.
Mr. Jérôme Guiraud is not considered independent within the meaning of the Code.
The Board’s composition, independence, competencies, and qualifications are detailed in the
Board Profile
and the
D&I Policy. The Board Profile is assessed annually, taking into account
the required competencies and expertise required for OCI’s mission and strategic priorities,
opportunities and threats, and its aim of long-term value creation. Appointments of new Board
members are made based on objective selection criteria highlighting the specific skills and
experience needed to ensure a balanced Board composition and to match the overall Board
profile.
The Board undertakes necessary measures to ensure diversity in education, professional
experience, nationality, age and gender in the selection of new candidates for the Board. In
addition, the Board tries to maintain a balance between experience and affinity with the nature and
culture of the Group. In this regard, the Board will follow the development of female talent in the
organization closely. New appointments are based on objective selection criteria highlighting the
specific skills and experience needed to ensure a rounded Board. With regard to vacancies, the
Board prepares a profile based on the required education and professional experience.
In 2020 two new Directors were appointed to the Board, contributing to diversity in age,
nationality, knowledge, gender and experience:
• Ahmed El-Hoshy (CEO) was appointed as Executive Director. Mr. Ahmed El-Hoshy has a
wide range of knowledge and experience in the businesses conducted by OCI and corporate
finance. Prior to joining OCI in 2009, Mr. Ahmed El-Hoshy began his career in Goldman Sachs’
Leveraged Finance group in New York and Dubai. Before appointed CEO of OCI, Mr. Ahmed
El-Hoshy was COO of OCI and CEO of OCI Americas.
• Heike van de Kerkhof was appointed as Non-Executive Director and has a wide range of
knowledge and experience in the chemicals industry, in both operational and strategic roles,
thought leadership in ESG strategy and strong focus on innovation and sustainability. Ms.
Heike van de Kerkhof is CEO of a global specialty chemicals company and holds several non-
executive positions.
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98BOARD REPORT
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Diversity & Inclusion
The Board acknowledges the importance of diversity within its Board and is considering its overall
size and composition to look for opportunities to increase the female representation in the Board.
OCI’s target is to improve gender diversity and to maintain diversity within the Board while taking
into account nationality, age, gender and background of education and professional experience of
the Directors.
In October 2020, Ms. Heike van de Kerkhof was appointed as Non-Executive Director, increasing
the total female representatives in OCI’s Board to three out of thirteen members, or 23% of the
Board. Despite the male-dominated nature of the industries OCI is active in, in case of a vacancy
in the Board, OCI will continue to use all efforts in the coming years to find a suitable female
candidate.
Following the launch of the Board Diversity program in 2019, we further reinforced our
commitment to fostering an inclusive culture by launching a group-wide Diversity and Inclusion
program in 2020. The program aims to ensure fairness, equality and diversity in recruiting,
compensating, motivating, retaining, and promoting employees. We are fortunate to have a
diverse global workforce encompassing 32 nationalities located in ten countries, but we lag in
gender diversity. Though we operate in traditionally male dominated industries, we are working
to improve our gender diversity in both technical and non-technical roles and at all levels of our
organization.
We have set internal benchmarks and targets to improve our recruitment processes, conduct
de-biasing training, provide sponsorship and mentorship of minority employees, and develop
employee networks that help them succeed. The de-biasing training conducted in 2020 was
positively received, and participants’ feedback provided relevant insights, amongst others that
there is support across the Group for increasing awareness on diversity and inclusion. In addition,
all HR teams completed a full de-biasing review of recruitment processes and will extend this
review to compensation, retention and promotion processes in 2021.
On a group level, we announced a target to increase female representation in senior leadership
to 25% by 2025. We also set an internal target of filling at least 20% of all vacancies with female
candidates. During the year, 100% of our HR community completed the de-biasing training, which
helped improve the diversity of our hiring in 2020 despite limitations on hiring during the COVID-19
pandemic. We hired 18.5% more women in 2020 compared to 2019 by filling 20.6% of vacancies
with female candidates during the year. Female representation within the Group remained stable
in 2020 compared to 2019 at 10.5%. Going forward, we will continue to focus on female turnover
analysis and initiatives to retain female talent as part of our diversity program.
A new performance measure relating to diversity and inclusion was added to the long-term
incentive plan of the Executive Directors that will apply from 2021, thereby aligning remuneration
more closely to performance of our strategic priorities and long-term interests.
Board involvement
Members of the Board regularly visit one or more of OCI’s plants, headquarters and corporate
offices to gain greater familiarity with the workforce and senior management and to develop
deeper knowledge of local operations, local customs, operational opportunities and challenges,
and the business in general.
In January 2020, prior to COVID-19 restricting international travel, the Board visited Abu Dhabi to
meet Fertiglobe management and visit one of Fertiglobe’s plants in Abu Dhabi. The visit deepened
the Board's understanding of the history, legacy set-up, vision, values, financial performance and
cost optimization initiatives, and operational safety performance. The Board was impressed by the
focus on and culture of health, safety and environment. The products and production processes
were further explained during a tour of the site and a visit to the control rooms.
The Board interacts with senior management throughout the entire organization on various
occasions and in various settings. The Board is regularly informed about relevant topics by OCI’s
senior leaders and experts during Committee and Board meetings, annual site visits, and also as
part of their ongoing professional education.
In 2020, the Board was trained on sustainability and sustainability initiatives that reduce OCI’s
environmental impact, grow OCI’s green portfolio and innovate more effective ways of reaching the
world's carbon neutral goals.
As part of the Company's drive to create a cohesive group culture, the Board approved the launch
of the OneOCI platform encouraging a dialogue across all locations. The Executive Directors
host bi-annual townhall meetings including Q&A session for all employees as part of the OneOCI
platform.
The Board also closely monitored the developments and Company response to COVID-19,
including receiving regular updates from the COVID-19 taskforce.
ESG
ESG and sustainability are imbedded into all aspects of our organization, including our strategic
objectives, risk management, capital allocation and financial planning, operational and commercial
activities, and other medium and long-term decision-making.
The Board has overall responsibility for OCI’s strategy, business objectives, and risk management,
including ESG and sustainability. The Health, Safety and Environment Committee evolved in
2021 to formally include sustainability. The Committee’s responsibilities include overseeing our
approach to managing the risks and opportunities related to sustainability, climate change, and
our environmental impact. Ms. Heike van de Kerkhof was appointed as Non-Executive Director
during the EGM on 20 October 2020 having a strong focus on ESG, innovation and sustainability,
and joined the HSE & Sustainability Committee in 2020.
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Annual Report 2020
99The Board has mandated the Company to communicate its sustainability strategy and has
approved OCI’s long-term environmental targets. In addition to dedicated focus by the HSE &
Sustainability Committee, Board sessions will continue to spend time on ESG topics. The Board
has tasked the Executive Directors with the management of ESG and sustainability objectives,
including the development and implementation of our ESG targets and strategy, supported by
the Group Corporate Affairs Director. A new performance measure relating to ESG was added to
the long-term incentive plan of the Executive Directors that will apply from 2021, thereby aligning
remuneration more closely to performance of our strategic priorities and long-term interests.
Each production facility’s leadership team is responsible for identifying and evaluating sustainability
projects and opportunities, and report on their progress to the Executive Directors during the
site’s monthly business review. The Capex Committee reviews and approves sustainability-related
capex with a view to balance our sustainability goals with our other commitments and investment
returns thresholds. We also appointed a Sustainability Director for Europe in 2020 to support our
European assets with assessing potential decarbonization projects.
Culture
OCI has grown significantly over the last 12 years at a compound annual growth rate (CAGR)
of 23% since 2008, and because of that ramp up the focus was on creating strong local teams
resulting in a diverse workforce with 25 nationalities located in ten countries. With our rapid growth
phase complete, we are strengthening our group culture to become a cohesive and united global
organization.
During the year, we launched the OneOCI platform to bring together the best of OCI under one
unified culture, a shared set of values, and a platform to encourage dialogue across our locations.
OneOCI provides a central hub for employee dialogue across all locations and functions, facilitates
information sharing and collaboration, recognizes employee development by highlighting personal
and professional achievements, and creates opportunities for greater transparency and alignment
on the Group’s strategy through regular newsletters and townhalls led by the Executive Directors.
The Group’s refreshed purpose of
cultivating a sustainable world through cleaner fuel
solutions, lower carbon feedstocks, and global food security.
provides a clear ambition, with
goals and strategic objectives that strive to achieving that vision.
Our values promote our culture of CARE – Collaboration, Agility, Resourcefulness, Excellence –
through which we strive to contribute positively to our world, our communities, our customers,
and each other at OCI. Employees are encouraged to uphold these values both at work and in
their day-to-day lives.
OCI’s culture is underpinned by its Code of Conduct, which requires all employees to act with
honesty and integrity to foster a business environment that protects the rights and interests of
all stakeholders. Our Code of Conduct also highlights our zero- tolerance policy for any form of
harassment or bullying. Employees are required to treat all individuals with respect, tolerance,
dignity, and without prejudice to create a mutually respectful, collaborative, and positive working
environment. We do our utmost to provide employees with a safe environment to address
any issue directly with management, and through our Whistleblower Policy we also provide a
confidential procedure to raise any concerns, instances of discrimination, and other breaches to
our Code of Conduct.
Compliance
We strive to conduct all business activities responsibly, transparently, and with integrity and
respect towards all stakeholders. These values underpin everything we do and form the
framework which defines the day-to-day attitudes and behaviours of our employees.
To make those values clear and provide clear ground rules for how we do business, our
Compliance Framework consists of policies that describe in specific terms what we stand for as
a company and the conduct required in the workplace, in how we deal with business partners,
serve our customers, and the broader responsibilities we have to the communities in which we
work and live. The Compliance Framework also sets out rules on important topics such as the
prohibition of bribery, dealing with confidential information and conflicts of interest, competition
law, third-party due diligence, the importance of accurate record keeping and reporting, and
explains the possibility of disciplinary measures when in breach of the framework.
All employees are trained on the key principles and applications of the Compliance Framework
through a group-wide e-learning platform and can raise any concerns and breaches through a
safe and confidential whistleblowing and incident reporting procedure. An anonymous reporting
procedure is also available, through which employees can report to a whistleblower hotline hosted
by a third-party hotline provider. All reports are handled with the utmost care and confidentiality,
regardless of if reported internally or via the anonymous reporting hotline.
The Chief Legal and Human Capital Officer (CLHCO) is the Executive Director responsible for
ethics and compliance. The Director Compliance, in close collaboration with the CLHCO and the
rest of the Executive Directors, implements our group Compliance Program and ensures that our
Compliance Framework remains in line with applicable regulations and is properly applied. The
Integrity Committee, comprising of the CLHCO, the CFO and the Director Compliance, handles
incidents of a severe nature.
We refer to the Compliance section on page 87 for further details on OCI’s Compliance
Framework, including compliance with the Code of Conduct and the Business Partner Code
of Conduct. OCI places great value on its Compliance Framework, which is fundamental to its
reputation and continued success.
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Annual Report 2020
100Assessment and evaluation of the Board
An evaluation of the Board is performed every year by an external advisor. OCI engaged the
services of Lintstock to assist with the 2020 review of the Board’s performance. Lintstock is
a corporate governance advisory firm that specializes in facilitating Board reviews and has no
connection with OCI.
The first stage of the review involved Lintstock engaging with the Co-Chair and Company
Secretary to set the context for the evaluation and to tailor the survey content to the specific
circumstances of OCI. All Board members were then invited to complete an online survey
addressing the performance of the Board and its Committees. The anonymity of the respondents
was ensured throughout the process in order to promote an open exchange of views.
The exercise was weighted to ensure that core areas of Board and Committee performance were
addressed, with a particular focus on the following topics:
• COVID-19 and the focus, priorities and risk management in response to the COVID-19
pandemic;
• The governance changes that took place during 2020 in relation to the changes made to the
roles and responsibilities;
• The overall Board composition and composition of the Committees;
• The oversight of various aspects of risk, and the effectiveness of OCI’s approach to HSE and
monitoring compliance with relevant regulations and legislation;
• The culture and behaviour throughout OCI;
• The development, clarity and achievability of OCI’s strategic plan and the integration of
sustainability into OCI’s business strategy and operations;
• The effectiveness of Board meetings held remotely using video-conferencing technology;
• The effectiveness of monitoring developments in the market environment, including the digital
developments relevant to OCI, and any likely impacts on the business;
• The organizational structure of OCI at senior levels, and the Board’s oversight of the succession
plans for the Board and the layer of management below the Board to manage and develop
talent;
• The understanding amongst Board members of investors, customers and employees, and the
development of the mechanisms by which the Board engages with key stakeholder groups;
• The atmosphere at Board meetings, and the extent to which the experience of Non-Executive
Directors is drawn on for the benefit of the business;
• The quality of information and support available to the Board, including specific areas in which
Directors would benefit from greater training or support in future;
• The individual performance and personal development of each of the Board members.
The overall feedback from the evaluation in 2020 was that the Board members feel the Board
generally functions well. The above topics have the constant attention of the Board throughout
the year, with a particular focus on strategy, operational excellence, sustainability, culture and
behaviour, Board composition and succession planning.
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Annual Report 2020
101Shareholders’ rights and meetings
OCI’s shareholders exercise their rights through the GM. An AGM is held no later than six months
after the end of OCI’s financial year (which equals a calendar year). The 2020 AGM was held on 17
June 2020.
The GM has the authority to discuss and decide on inter alia the following main items:
• The adoption of the annual accounts;
• The release of the Directors from liability for their respective duties, insofar as the exercise of
such duties is reflected in the annual accounts and/or otherwise disclosed to the GM prior to
the adoption of the annual accounts;
• The appointment of the external auditor;
• The (re)appointment, dismissal and suspension of the Directors;
• Amendments to the remuneration policy applicable to the Board;
• An advisory vote regarding the remuneration report applicable to the Board;
• The issue of shares and the restriction or exclusion of pre-emptive rights of shareholders (both
insofar not delegated to the Board);
• The reduction of share capital; and
• The approval of those decisions of the Board that entail a significant change in the identity or
character of OCI or its business.
The agenda for each GM is published on OCI’s website in advance of the GM. After a GM the
minutes are made available on OCI’s website as well.
Shareholders representing more than 3% of the issued share capital may submit proposals for the
agenda, if substantiated and submitted in writing at least 60 calendar days in advance of the GM.
Additional EGMs may be convened at any time by the Board or by one or more shareholders
representing more than 10% of the issued share capital. During 2020, an EGM was held on 20
October 2020.
Votes representing shares can usually be cast at the GM either personally or by proxy. No
restrictions are imposed on these proxies, which can be granted electronically or in writing to OCI
or independent third parties. OCI’s shareholders may cast one vote for each share. All resolutions
adopted by the GM are passed by an absolute majority of the votes cast, unless Dutch law or
OCI’s articles of association prescribe a larger majority.
In 2020, the AGM and EGM were held virtually per the Temporary Dutch COVID-19 Justice and
Security Act (Tijdelijke wet COVID-19 Justitie en Veiligheid). Shareholders were invited to follow the
AGM remotely through a live webcast and the EGM remotely via conference call. Prior to the GM,
shareholders were invited to vote via a proxy and submit written questions about the items on the
agenda which were answered during the GM.
The following proposals were voted on during the 2020 GM’s:
• The adoption of the Annual Accounts 2019 and allocation of profits;
• The discharge of the Executive Directors and Non-Executive Directors from liability;
• The reappointment of the Executive Directors and Non-Executive Directors and the
appointment a new Executive Director and a new Non-Executive Director;
• The approval of the new Remuneration Policy;
• To advise on the 2019 Remuneration Report;
• The extension of the designation of the Board as the authorised body to issue shares in the
share capital of OCI, to restrict or exclude pre-emptive rights upon the issuance of shares and
to repurchase shares in the share capital of OCI; and
• The appointment of KPMG Accountants N.V. as auditor charged with the auditing of the annual
accounts for the financial year 2020.
External Auditor
OCI’s external auditor is appointed by the AGM. The Audit Committee evaluates the functioning
of the external auditor and recommends to the Board the external auditor to be proposed for
(re)appointment by the AGM. At the 2020 AGM, KPMG Accountants N.V. was appointed as
external auditor for OCI for that same year.
The external auditor attends all Audit Committee meetings. During these meetings, the external
auditor discusses the outcomes of the audit procedures. Key audit topics are discussed. The
external auditor receives the financial information per quarter and can comment on and respond
to such information, which is also included in OCI’s quarterly condensed financial statements.
The external auditor is also present at the AGM and may be questioned on its statement of the
fairness of the financial statements.
OCI’s lead audit partner needed to rotate off after signing the 2019 financial statements early
2020. Since then, the new lead audit partner took over, after already having attended all Audit
Committee meetings during the 2019 financial statements audit and having been involved in the
analysis and conclusions of all major accounting and reporting matters during 2019. Furthermore,
after closing of the Fertiglobe transaction end 2019, the new lead audit partner has been
responsible to oversee the onboarding of Fertil in OCI’s group audit.
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OCI N.V.
Annual Report 2020
102Independence of the auditor is a continued area of focus. In accordance with OCI’s external audit
independence policy, the Audit Committee reviews the independence of the auditor annually.
Internal auditor
The internal Audit & Risk team assists the Audit Committee, Executive Directors, and local
management by facilitating the identification of risks and the promotion or risk awareness and
ownership across our organization. The internal Audit & Risk department reports the results
from internal audits, risk assessments from operating companies and group consolidated risk
dashboards to the Audit Committee quarterly and performs periodic independent internal audits to
review any specific issues at the subsidiary and holding company levels.
Decree Article 10 EU Takeover Directive
OCI confirms that it has no anti-takeover instruments, i.e.: of measures that are primarily intended
to block future hostile public offers for its shares. Although the members of the Sawiris family have
not entered into any formal shareholders agreement, they have historically coordinated their voting
on the OCI shares and should therefore be regarded as parties acting in concert (
personen die in
onderling overleg handelen
) as defined in section 1:1 of the Dutch Financial Supervision Act (
Wet op het financieel toezicht
). Their collective voting rights of 55.97% as at 31 December 2020 act
as an implicit anti-takeover element.
Compliance with the Code
OCI is compliant with the Code.
Potential conflicts of interest
Potential or actual conflicts of interest are governed by OCI’s articles of association and by-laws
which regulations are in line with the relevant principles of the Code and Dutch law. A Director
shall immediately report any conflict of interest or potential conflict of interest that is of material
significance to the other Directors and may not take part in any discussion or decision-making
that involves a subject or transaction in relation to which he/she has a potential conflict of interest
with OCI.
During 2020, no transactions occurred in respect of which a Director had a conflict of interest.
Related party transactions
OCI has a
Related Party Transactions Policy
in place, providing adequate protection for
the interests of OCI and its stakeholders which has been prepared with due observance of the
requirements of Dutch law, the Code, OCI’s articles of association and by-laws.
The overview of related party transactions in 2020 is disclosed in the Financial Statements in
note 30.
BOARD REPORT
CONTINUED
Business performanceStrategy and value creation Risk management and compliance Other information
Corporate governance
Financial statementsSustainability
OCI N.V.
Annual Report 2020
103REMUNERATION REPORT
Introduction by the Chair of the Nomination and Remuneration Committee
On behalf of the Board, I am pleased to present our 2020 Remuneration Report, in which we
comment on OCI’s performance and how 2020 events have impacted the remuneration paid to
our Executive and Non-Executive Directors.
During the year, OCI was able to deliver on its strategy despite the unprecedented global
circumstances we all faced due to the COVID-19 pandemic. The Executive Directors effectively
navigated the company to deliver strong results during the year in addition to implementing
several operational, commercial, and cultural changes such as operational and commercial team
restructuring, the launch of the OneOCI platform with a focus on diversity and inclusion, and
a cost savings program, all while ensuring each OCI location remained as safe and healthy as
possible for our employees, contractors and suppliers during the pandemic and without applying
for government assistance programs or requiring redundancies or furloughs.
The Committee is satisfied by the swift actions and decisions made in the past year and is
impressed with the collaboration amongst the team which has been through several recent
changes.
At the 2020 AGM Mr. Ahmed El-Hoshy was appointed as statutory director of the company,
following his appointment as Chief Operating Officer (COO) on 25 November 2019. When Mr.
Nassef Sawiris assumed the position of Executive Chair of OCI’s Board per 1 August 2020,
Mr. El-Hoshy succeeded Mr. Sawiris as Chief Executive Officer (CEO). Following the change in
position for Mr. Sawiris, Mr. Michael Bennett assumed the role of Non-Executive Co-Chair and
Senior Independent Director and Mr. Sipko Schat assumed the role of Vice Chair of the Board of
Directors.
This Remuneration Report explains the application of the 2020 Remuneration Policy which was
approved by OCI’s shareholders at the 2020 AGM with 99.43% votes in favour. In line with the
2020 Remuneration Policy, the Remuneration Report is prepared in the spirit of the draft, non-
binding guidelines of the European Commission for disclosure. Mindful of the advisory vote on
our 2019 Remuneration Policy, which was approved by an unequivocal majority (99.38% votes in
favour), this Remuneration Report is prepared in a similar format, whereby some minor changes
were made to enhance readability, take out duplicates and step-up in the level of disclosure.
As a global producer and distributor of nitrogen and methanol products, our purpose is to
cultivate a sustainable world through global food security and greener fuel solutions. Our strategy
integrates our financial, operational, commercial, and sustainability objectives to create long-
term, sustainable value for all our stakeholders as described throughout the 2020 annual report.
This focus on sustainable value creation is reinforced by our remuneration policy, wherein both
our short-term and long-term incentives include not just financial targets, but environmental,
social, and operational goals as well. These targets are designed to be interdependent to ensure
equitable focus on each of our strategic priorities, which include operational excellence, a
commitment to health and safety, business optimization, global commercial strategy, sustainable
solutions, decarbonization, and maximizing cash flow.
Accordingly, we believe the 2020 Remuneration Policy provides good alignment between the
remuneration of the Executive Directors and shareholders’ long-term interests. The Executive
Directors are incentivized through both short-term and long-term compensation schemes that
align to the group’s long-term value creation as well as short- and medium-term company targets,
individual objectives and focus areas, and strategic non-financial metrics that are fundamental to
the group’s long-term success.
The Remuneration Report will be subject to an advisory vote at our 2021 AGM.
Looking ahead
This year’s Remuneration Report contains an additional section outlining some changes to
the operation of the Long Term Incentive Plan (LTIP) of the Executive Directors that will apply
from 2021. With support from external advisors, the Nomination and Remuneration Committee
reviewed the LTIP with particular focus on the selection of performance measures. The new
performance measures selected align our remuneration practice more closely to performance
of our strategic priorities. These changes are within the parameters set out in the Remuneration
Policy.
Based on on-going conversations with our shareholders and the positive feedback from other
stakeholders I am confident the amendment strengthens the execution of the Remuneration Policy
to meet its purpose to attract, motivate and retain the qualified individuals needed to achieve
OCI’s strategic and operational objectives, also on the long-term.
On behalf of the Nomination and Remuneration Committee,
Sipko Schat
Chair
Business performanceStrategy and value creation Risk management and compliance Other information
Corporate governance
Financial statementsSustainability
OCI N.V.
Annual Report 2020
104
This section of the Remuneration Report details how the 2020 Remuneration Policy was applied in
2020 for the Non-Executive Directors.
Non-Executive Directors
The remuneration of the Non-Executive Directors consists of fixed fees for their Board
Membership and for services on the Committees. To ensure their independence the Non-
Executive Directors are not entitled to any variable remuneration linked to the performance of the
Company. The remuneration is set at the level required to attract qualified Non-Executive Directors
with the personal skills, competencies and international experience required to oversee the
company’s strategy and contribute to its performance and the long-term value creation.
The Non-Executive Directors do not receive any benefits. They are reimbursed for OCI-related
expenses for travel, accommodation, and representation.
The table below summarizes the details of the individual remuneration of the Non-Executive
Directors.
Non-Executive
Director
Year
Annual
Bboard fee
Audit committee
membership
Nomination and
remuneration
committee
Health safety,
environment
committee
Extraordinary
Items
Total
Remuneration
Proportion
of Fixed
Remuneration
M. Bennett
2020 300,000 - 7,500 - - 307,500 100%
2019 290,000 - 7,500 3,750 - 301,250 100%
S. Schat
2020 150,000 20,000 20,000 - - 190,000 100%
2019 145,000 20,000 17,500 - - 182,500 100%
A. Montijn-
Groenewoud
2020 150,000 - 7,500 10,000 - 167,500 100%
2019 145,000 - - 8,750 - 153,750 100%
R.J. van
de Kraats
2020 150,000 25,000 7,500 - - 182,500 100%
2019 145,000 25,000 7,500 - - 177,500 100%
G.
Heckman
2020 150,000 - - 7,500 - 157,500 100%
2019 145,000 - - 8,750 - 153,750 100%
J. Guiraud
2020 150,000 20,000 7,500 - - 177,500 100%
2019 145,000 20,000 7,500 - - 172,500 100%
D. Welch
1
2020 150,000 - - 7,500 90,000
2
247,500 100%
2019 88,710 - - 3,750 - 92,460 100%
D. Fraser
3
2020 150,000 20,000 - - 100%
-
170,0002019 88,710 10,000 - - - 98,710 100%
H. van de
Kerkhof
4
2020 29,348 - - 1,467 - 30,815 100%
2019 n/a n/a n/a n/a n/a n/a n/a
J. Ter Wisch
5
2020 69,643 9,286 3,482 - - 82,411 100%
2019 145,000 20,000 7,500 - - 172,500 100%
1
Appointed 29 May 2019.
2
The amount reported as extraordinary item for Mr. Welch in 2020 is the fee for services on the Board of Fertiglobe
Holding Ltd
3
Appointed 29 May 2019
4
Appointed 20 October 2020
5
Appointment ended 17 June 2020
REMUNERATION REPORT
CONTINUED
Business performanceStrategy and value creation Risk management and compliance Other information
Corporate governance
Financial statementsSustainability
OCI N.V.
Annual Report 2020
105
This section of the Remuneration Report explains how the 2020 Remuneration Policy was applied
in 2020 for the Executive Directors.
Executive Directors
The Executive Directors referred to in this Remuneration Report are the Executive Chair (former
CEO), CEO (former COO), Chief Financial Officer (CFO), and Chief Legal and Human Capital
Officer (CLHCO). For this Remuneration Report, the remuneration of the CEO (former COO) is
reported as if he was an Executive Director for the full year 2020. The details of their appointment
terms are as follows:
Name Title Date of appointment
Current time
commitment
N. Sawiris CEO/Executive Chair 16 January 2013 Full time
A. El-Hoshy COO/CEO 17 June 2020 Full time
H. Badrawi CFO 1 October 2017 Full time
M. de Vries CLHCO 1 June 2019 80% contract
Summary of pay in the year
The details of the individual remuneration of the Executive Directors and its costs to the Company
are as follows:
Fixed
remuneration Variable remuneration
Proportion of
fixed and variable
remuneration
Executive
Director Year
Annual Base
Salary incl.
25% benefits
allowance
1
Annual bonus
Long-term
Incentives
cost-to-
company
2
Medical
insurance
Total
Remuneration Fixed Variable
N. Sawiris
Executive
Chair (former
CEO)
2020 1,583,334 n/a
3
2,393,191 n/a 3,976,525 40% 60%
2019 2,000,000 1,200,000 2,641,951 n/a 5,841,951 34% 66%
A. El-Hoshy
CEO (former
COO)
2020 1,091,667 921,032 1,420,277 n/a 3,432,976 32% 68%
2019 n/a n/a n/a n/a - n/a n/a
H. Badrawi
CFO
2020 1,150,000 878,715 1,193,956 n/a 3,222,671 36% 64%
2019 1,150,000 552,000 863,471 6,815 2,572,286 45% 55%
M. de Vries
CLHCO
2020 526,667
4
402,426 356,049 n/a 1,285,142 41% 59%
2019 280,000
4,5
134,400 108,060 n/a 522,460 54% 46%
1
These figures exclude employer’s social security payments ($0.6 million).
2
The amounts mentioned in this column are based on accounting standards (IFRS).
3
Mr. Sawiris requested the Committee to waive his bonus entitlement for the first 7 months of 2020; As Executive Chair he is
no longer entitled to an annual bonus.
4
Based on 80% contract.
5
Pro-rated to 7 months, reflecting the appointment to the Board per 1 June 2019.
Annual base salary (including 25% benefits allowance)
Salary is fixed cash compensation which enables the recruitment and retention of individuals of the
caliber required to drive business performance and execute OCI group’s strategy.
Salaries are set in line with individual performance and contribution to company goals with
reference to external market data.
Following the change to the positions held by Mr. Sawiris from CEO to Executive Chair per 1
August 2020, his annual base salary was reduced by 50% from $2,000,000 to $1,000,000. At
the same time, the annual base salary of Mr. El-Hoshy who assumed the position of CEO was
increased by 9.5% from $1,050,000 to $1,150,000.
REMUNERATION REPORT
CONTINUED
Business performanceStrategy and value creation Risk management and compliance Other information
Corporate governance
Financial statementsSustainability
OCI N.V.
Annual Report 2020
106
The Committee has evaluated the CLHCO’s performance since joining the Board. She has
strongly established herself within the role. As such, the annual base salary of the CLHCO was
increased by 16.7% from $480,000 to $560,000 per 1 June 2020 (based on 80% contract).
The Executive Directors’ base salaries include a fixed cash allowance of 25% of the total which is
designed to compensate for the personal provision of key benefits such as pension, car, life and
disability insurance and other key benefits. OCI does not provide for a pension fund nor contribute
to a pension plan for its Executive Directors.
The Executive Directors do not receive housing allowances or other expatriate-style benefits. They
are reimbursed for OCI-related business expenses. In 2020 no extra-ordinary items or one-off
payments were paid.
The base salaries of the Executive Directors include any compensation for their positions on the
Board. The Executive Directors do not receive remuneration from other
OCI Group companies.
Annual Bonus
The annual bonus plan supports our strategic priorities in both the short and long term, with
challenging financial and non-financial targets. The Executive Chair is not entitled to an annual
bonus. Mr. Nassef Sawiris requested the Board to waive his bonus for the first 7 months of
2020. For the CEO the on-target annual bonus opportunity is 75% of annual base salary. For the
other Executive Directors the on-target opportunity is 60% of annual base salary. The maximum
opportunity is 200% of target (i.e. 150% of annual base salary for the CEO and 120% of annual
base salary for the other Executive Directors).
The structure can be summarized as follows:
For 2020, the performance measures for the annual bonus can be summarized as follows:
Executive
Director
Performance Measure and
weighting
Target
achievement
%
Bonus pay-
out as % of
base salary
Base salary
in USD
2020 Bonus
outcome in
USD
A. El-Hoshy
Cash flow (40%) 92% 24.45%
1
Sales volume (20%) 96% 12.72%
1
1st Strategic and non-financial
(12.5%) 175% 14.49%
1
2nd Strategic and non-financial
(12.5%) 155% 12.84%
1
HSE (15%) 200% 19.88%
1
Total 84.37%
1
1,091,667 921,032
H. Badrawi
Cash flow (40%) 92% 22.14%
Sales volume (20%) 96% 11.52%
1st Strategic and non-financial
(12.5%) 155% 11.63%
2nd Strategic and non-financial
(12.5%) 175% 13.13%
HSE (15%) 200% 18.00%
Total 76.41% 1,150,000 878,715
M. de Vries
Cash flow (40%) 92% 22.14%
Sales volume (20%) 96% 11.52%
1st Strategic and non-financial
(12.5%) 175% 13.13%
2nd Strategic and non-financial
(12.5%) 155% 11.63%
HSE (15%) 200% 18.00%
Total 76.41% 526,667 402,426
1
Bonus opportunity calculated on the basis of 7 months as COO with a bonus opportunity of 60% of annual base salary and
5 months as CEO with a bonus opportunity of 75% of annual base salary.
REMUNERATION REPORT
CONTINUED
+
60% corporate financial
performance measures
Cash Flow
Sales Volumes
25% strategic
and non-financial
performance
measures
15% health, safety
and environmental
performance
measures
Annual
Bonus
+ =
Business performanceStrategy and value creation Risk management and compliance Other information
Corporate governance
Financial statementsSustainability
OCI N.V.
Annual Report 2020
107
REMUNERATION REPORT
CONTINUED
The following table summarizes performance against the 2020 strategic and non-financial
performance measures for each Executive Director. The combined weight of these performance
measures is 25% of the total annual bonus. The strategic and non-financial performance
measures link directly to the strategic priorities of operational excellence, business optimization,
global commercial strategy and sustainable solutions, thus contributing to maximizing cash flow.
Based on the assessment of all targets by the Committee as approved by the Board, the target
achievement is determined as per the table below.
Executive
Director
Strategic and
personal performance
measures and
weighting
2020
Performance outcome
Positioning
against
target
A. El-Hoshy
CEO (former
COO)
• Sustainability and
ESG (12.5%)
• Made significant progress on the development and
implementation of a sustainability strategy, including
setting and announcing greenhouse gas intensity
reduction targets.
• Clearly improved the ESG positioning of OCI whilst
considering the economic implications and feasibility of
the sustainability initiatives as well as the communication
around that to key stakeholders internally and externally.
175%
• OneOCI/
Leadership
(12.5%)
• Successfully brought the various OCI entities under one
common identity, creating more transparency and sense
of belonging across the group, whilst carefully managing
participations and recent COVID-19 developments.
• Clear focus on organizational development, including
staffing of key positions, thereby developing a platform
to benefit from a centralized oversight structure,
cooperation and disciplined reporting.
155%
H. Badrawi
CFO
• Trade and Overall
Risk Management
(12.5%)
• Further improved the financial trading governance and
control framework which has been rolled out at our trade
entities and is adapted to cover our existing trading
operations as well as capture future trades.
155%
• Cost Control,
Cash Management
and Optimization
(12.5%)
• Successfully managed the refinancing of the 2023
bonds, thus achieving a cash payback in under two
years, with a significant finance cost benefit.
• Realized above target saving on SG&A spend and
increased the cash/accounts managed within automated
sweeping and pooling structures.
175%
M. de Vries
CLHCO
• ESG: Social and
Governance
(12.5%)
• Defined a comprehensive organizational response to
employee experience and human-centered interaction
with the workforce throughout a challenging year
directing organizational performance.
• Launched several initiatives to ensure sustained
performance and health focusing on organizational
effectiveness.
• Further fostered a diverse and inclusive culture
specifically focusing on increasing female representation
with the workforce.
175%
• Business
contracts (12.5%)
• Successfully navigated and supported the business
from a legal perspective throughout the changed market
circumstances which resulted in no business disruptions
in supply chain thereby ensuring business operations
globally.
• Further improved the legal support framework and
business contracts, resulting in significant cost savings
as well as improved service levels to the business.
155%
Business performanceStrategy and value creation Risk management and compliance Other information
Corporate governance
Financial statementsSustainability
OCI N.V.
Annual Report 2020
108
The following table summarizes performance against the 2020 HSE performance measures. The
combined weight of the HSE performance measures is 15% of the total STI. The 2020 HSE-
performance as assessed by the HSE Committee and approved by Board was outstanding,
resulting in an achievement of 200% of target. Please refer to pages 70-73 for more information
on OCI’s HSE performance.
HSE Performance Measure 2020 target
2020
Performance
outcome
Positioning
against target
Lost Time Injury Rate (LTIR)
0.11 0.09
Total Recordable Incidents Rate (TRIR) 0.40 0.23
Process Safety Incidents Rate (PSIR)
0.80 0.38
Environmental Stewardship / EIR 0.40 0.29
Safety Culture and Awareness qualitative target focussing on
a wide range of initiatives to
promote a strong safety culture
Full year corporate HSE score 200%
Long term variable remuneration
Options (legacy arrangement)
All options held by the Executive Directors expired per 31 December 2020. No options were
exercised in 2020.
Bonus / Share Matching rights (legacy arrangement)
The Bonus / Share Matching plan was discontinued effective 1 January 2019; as such no new
matching rights were awarded in 2019 or 2020.
As at 31 December 2020, the Executive Directors had 38.196 share matching rights to bonus
shares outstanding.
Executive
Director
Award
cycle
Outstanding
year-end 2020
Value at grant
date in USD Vesting date
End of
lock-up period
N. Sawiris
2
2017 17,190 381,810 23-04-2021 23-04-2023
A. El-Hoshy 2017
1
14,633 325,016 09-04-2021 09-04-2023
H. Badrawi 2017 1,398 31,067 23-04-2021 23-04-2023
M. de Vries 2017
1
4,975 110,495 09-04-2021 09-04-2023
1
These represent awards granted before the appointment to the Board.
2
The 2016 Award could not vest on the plan date of 14 April 2020 as OCI was in a Closed Trading period and share-based
transactions were not allowed under the Insider Trading / Market Abuse regulations. The Awards vested on 11 May 2020, the
first Trading Day after the Closed Period.
Vesting of the share matching rights is contingent on the continued employment with OCI.
Restricted stock unit plan (legacy arrangement)
As at 31 December 2020, the current CEO and CLHCO had been granted Restricted Stock Units
from previous years, as follows:
Executive
Director
Award
cycle
Outstanding
year-end 2020
Value at grant
date in USD Vesting date
End of
lock-up period
A. El-Hoshy
2019
1
19,472 354,900
1/3
rd
: 07-02-2022 07-02-2023
2/3
rd
: 07-02-2023 07-02-2024
2018
1
27,346 585,000
1/3
rd
: 17-04-2021 17-04-2023
2/3
rd
: 17-04-2022 17-04-2024
M. de Vries 2018
1
14,263 296,163
1/3
rd
: 17-04-2021 17-04-2023
2/3
rd
: 17-04-2022 17-04-2024
1
These represent awards granted before the appointment to the Board.
Vesting of the Restricted Stock Units is contingent on continued employment with OCI.
REMUNERATION REPORT
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Corporate governance
Financial statementsSustainability
OCI N.V.
Annual Report 2020
109
Performance share units
As at 31 December 2020, the Executive Directors had been granted 713,851 conditional
performance share units at target.
Executive
Director
Award
cycle
Outstanding
year-end
2019
Granted
conditional
in 2020
Outstanding
year-end
2020
Value at
grant date in
USD
1
Vesting date
End of
lock-up
period
N. Sawiris 2018 84,873 - 84,873 2,181,674 25-02-2021 07-02-2023
2019 116,002 - 116,002 2,500,000 07-02-2022 07-02-2024
2020 - 135,354 135,354 2,500,000 07-02-2023 07-02-2025
A. El-Hoshy
2018
2
41,376 - 41,376 1,063,577 25-02-2021 07-02-2023
2019
2
47,855 - 47,855 1,031,340 07-02-2022 07-02-2024
2020
2
- 71,061 71,061 1,312,500 07-02-2023 07-02-2025
H. Badrawi 2018 40,315 - 40,315 1,036,304 25-02-2021 07-02-2023
2019 66,701 - 66,701 1,437,500 07-02-2022 07-02-2024
2020 - 77,829 77,829 1,437,500 07-02-2023 07-02-2025
M. de Vries
2020 - 32,485 32,485 600,000 07-02-2023 07-02-2025
1
The grant value is a percentage of the annual base salary. For the Executive Directors this percentage is currently fixed at
125% as laid down in the Remuneration Policy.
2
Granted before appointment as Executive Director.
Vesting of 2017 performance shares award
Based on the PSP awards of 7 February 2017, conditional shares were granted to the Executive
Chair. The vesting of these shares was conditional on OCI’s TSR performance in the three-year
performance period ending 7 February 2020 and continued employment. The vesting of this
Award could not take place on the original vesting date, 7 February 2020 as OCI was in a closed
trading period. Hence, the Award vested at the first trading day after the Closed Trading Period,
being 25 February 2020. Over the 3-year performance period OCI’s TSR performance ranked
6th in the TSR peer group at the 58th percentile. As a result, the award vested at 77% of target.
The Committee reviewed this achievement in light of the broader financial as well as non-financial
performance of the Group in the respective performance period (7 February 2017 – 7 February
2020) and decided to make no adjustments to the pay-out.
Share ownership guidelines
Subject to the Share Ownership Guidelines for the Executive Directors of the Board all Executive
Directors are required to own a percentage of OCI shares of their salary. These percentages are a
holding of 300% for the CEO and Executive Chair and 150% for the other Executive Directors.
The table below summarizes the number of shares currently held by Executive Directors (which
have no further performance conditions attached). Their holding as a percentage of salary is
based on a share price of € 15.72 ($ 19.22) (the closing share price on 31 December 2020).
Executive Directors are expected to build up share ownership over a period of five years of the
date of appointment. Until this requirement has been met, Executive Directors must retain at least
50% of any vested shares from the PSU Plan. The Executive Chair and CFO already meet the
share ownership guidelines.
Executive Director Shares held
Shareholding
1
(% of salary)
N. Sawiris 69,374,747
Majority shareholder
in OCI N.V.
A. El-Hoshy 60,928 102%
H. Badrawi 129,601 217%
M. de Vries 10,647 36%
1
Based on a share price of € 15.72 on 31 December 2020.
Internal pay ratio
In line with market practice, the calculation of the internal pay ratio per 31 December 2020 is
changed to include the value of the long term incentive (PSP/PSU). The global internal pay ratio is
calculated on the basis of the following parameters:
• Average total direct compensation of a reference group consisting of all our employees globally
(on an FTE basis)
• Total remuneration of our CEO, including the value of the long-term incentive based on
accounting standards (IFRS).
The global internal pay ratio as measured per 31 December 2020 is 39.2 for the CEO and on
average 32.8 for the Executive Board Directors. In 2019 these global internal pay ratios, calculated
on the basis of the total direct compensation, excluding the value of the long-term incentive, were
33.2 for the CEO and 20.2 for the Executive Directors.
REMUNERATION REPORT
CONTINUED
Business performanceStrategy and value creation Risk management and compliance Other information
Corporate governance
Financial statementsSustainability
OCI N.V.
Annual Report 2020
110
REMUNERATION REPORT
CONTINUED
This section of the Remuneration Report explains how the remuneration of the Directors develops over time and for the relevant periods it includes remuneration details for current and former Directors.
Development of directors’ remuneration, company performance and employee remuneration.
The table below sets out the change in remuneration for each individual director, the change in OCI’s company performance and the average change in remuneration for the employees at OCI
(excluding directors) over the past 5 years.
For the Non-Executive Directors, there is no link to the company performance to ensure their independence.
We have disclosed TSR performance at OCI as the main metric for company performance sustained over the long-term. This is in line with our Performance Share Unit Plan which has historically only
been measured on relative TSR performance.
For the average employee remuneration, we used the same data as for the calculation of the internal pay ratio. As the internal pay ratio is disclosed by OCI since 2017, only the data from the last four
years is available.
2020 2019 2018 2017 2016
Total Remuneration
(cost-to-company) % change
Total Remuneration
(cost-to-company) % change
Total Remuneration
(cost-to-company) % change
Total Remuneration
(cost-to-company) % change
Total Remuneration
(cost-to-company)
Executive Director’s Remuneration in USD
N. Sawiris,
Executive Chair/former CEO
3,976,525 -31.9% 5,841,951 -7.1% 6,290,697 +29.9% 4,842,242 -7.7% 5,243,873
A. El-Hoshy,
CEO/former COO
3,432,976
1
n/a n/a n/a n/a n/a n/a n/a n/a
H. Badrawi,
CFO
3,222,671 +25.6% 2,565,471 +7.0% 2,397,640 n/a 351,500
2
n/a n/a
M. de Vries,
CLHCO
1,285,142 n/a 522,460
3
n/a n/a n/a n/a n/a n/a
S. Butt,
former CFO
n/a n/a n/a n/a n/a n/a 5,600,665 +81.8% 3,080,962
Non-Executive Director’s Remuneration in USD
M. Bennett,
USA, Co-Chair
307,500 +2.1% 301,250 -15.5% 356,575 -16.8% 428,750 -34.4% 653,486
S. Schat,
NED, Vice-Chair
190,000 +4.1% 182,500 +14.1% 160,000 - 160,000 - 160,000
A. Montijn-Groenewoud,
NED
167,500 +8.9% 153,750 +11.8% 137,500 -2.7% 141,250 n/a 72,500
4
R.J. van de Kraats,
NED
182,500 +2.8% 177,500 +9.2% 162,500 - 162,500 - 162,500
G. Heckman,
USA
157,500 +2.4% 153,750 +9.8% 140,000 - 140,000 +1.4%
138,125
J. Guiraud,
FR
177,500 +2.9% 172,500 +9.5% 157,500 - 157,500 - 157,500
D. Welch,
USA
247,500 n/a 92,460
5
n/a n/a n/a n/a n/a n/a
D. Fraser,
USA
170,000 n/a 98,710
6
n/a n/a n/a n/a n/a n/a
H. van de Kerkhof,
GER
30,815
7
n/a n/a n/a n/a n/a n/a n/a n/a
J. Ter Wisch,
NED
82,411
8
n/a 172,500 9.5% 157,500 -3.1% 162,500 -3.0% 167,500
Business performanceStrategy and value creation Risk management and compliance Other information
Corporate governance
Financial statementsSustainability
OCI N.V.
Annual Report 2020
111
2020 2019 2018 2017 2016
Total Remuneration
(cost-to-company) % change
Total Remuneration
(cost-to-company) % change
Total Remuneration
(cost-to-company) % change
Total Remuneration
(cost-to-company) % change
Total Remuneration
(cost-to-company)
Performance at OCI
TSR performance
65.82 -16.2% 78.50 +5.3% 74.57 -15.3% 88.05 +26.8% 69.42
Average Employee Remuneration and Internal pay ratio’s
Average employee remuneration –
global employee reference group
(FTE, Total Remuneration Costs)
93,170 -2.2% 95,287
9,10
n/a n/a n/a n/a n/a n/a
Internal pay ratio –
global employee reference
group
39.2
11
n/a
12
33.2
9,10
n/a n/a n/a n/a n/a n/a
Average employee remuneration –
EU+USA employee reference group
(FTE, Total Remuneration Costs)
n/a n/a n/a n/a 122,040 -0.7% 112,843 n/a n/a
Internal pay ratio –
EU+USA employee
reference group
n/a n/a n/a n/a 29.6 +19.4% 24.8 n/a n/a
1
A. El-Hoshy was appointed COO on 25 November 2019 and appointed member of the Board at the 2020 AGM on 17 June 2020; the amount represents his remuneration for the full year 2020.
2
H. Badrawi was appointed CFO on 1 October 2017 and appointed member of the Board at the 2018 AGM; the amount represents his remuneration for the part of 2017 financial year he was a Director.
3
M. de Vries was appointed as Executive Director and member of the Board per 1 June 2019; the amount is based on her 80% contract and represents her remuneration for the part of 2019 financial year she was a Director.
4
A. Montijn-Groenewoud was appointed as Non-Executive Director per June 2016.
5
D. Welch was appointed as Non-Executive Director per May 2019.
6
D. Fraser was appointed as Non-Executive Director per May 2019.
7
H. van de Kerkhof was appointed as Non-Executive Director per October 2020.
8
The appointment of J.A. Ter Wisch ended in June 2020.
9
Per 2019 we changed the employee reference group for calculating our internal pay ratio from regional to global.
10
The 2019 numbers are restated compared to our 2019 Remuneration Report as the numbers reported in 2019 were erroneously based on the consolidated, Q4 compensation for the employees of Fertil instead of the full year.
11
In line with market practice, the calculation of the internal pay ratio is changed per 2020 to include the value of the long-term incentives (PSP/PSU).
12
Due to the change in calculation methodology per 2020, the % of change between 2019 and 2020 would not correctly reflect the actual change in the internal pay ratio.
REMUNERATION REPORT
CONTINUED
Business performanceStrategy and value creation Risk management and compliance Other information
Corporate governance
Financial statementsSustainability
OCI N.V.
Annual Report 2020
112
Implementation of our Remuneration Policy in 2021 2021 Remuneration at a glance
The table below provides an overview of the 2021 Remuneration of the Executive Directors in a
glance.
Role Executive Chair CEO CFO CLHCO
Remuneration in 2021
Annual base salary
(with effect from
1 January 2021) $1,000,000 $1,250,000 $1,150,000 $560,000
1
2021 Target Bonus
opportunity (as a % of
annual base salary)
n/a 75% 60% 60%
2021 Target
PSU award (as a % of
annual base salary)
125% 125% 125% 125%
Share ownership
guidelines (as a % of
annual base salary)
300% 300% 150% 150%
1
Based on current 80% contract; the full-time equivalent is $700,000.
Salary
Per 1 January 2021
the annual base
salary of the CEO
will be increased to
$1,250,000 (8.7%
increase). This
reflects his strong
contribution since
promotion and the
fact that his salary is
closer to market.
There will be no
increases for the
other Executive
Directors.
Annual Bonus
The bonus will be
based on corporate
financial performance
measures (60%),
strategic, personal
(25%) and HSE
(15%) performance
measures as
detailed in the table
below. These will be
measured over the
financial year ending
31 December 2021.
The bonus
opportunities remain
unchanged with an
at target opportunity
of 75% of annual
base salary for the
CEO and 60% for
the other Executive
Directors. The
maximum opportunity
remains at 200% of
target for all Executive
Directors. The
Executive Chair is not
eligible for an annual
bonus.
Performance Share
Unit Plan
The 2021 PSU Awards
will be dependent on
relative TSR (60%) and
additional performance
measures (40%),
selected from two sets
of strategic incentives.
(operational excellence
and ESG). Further
details of measures
and weighting are
given below and the
targets for operational
excellence and ESG
will be disclosed in the
2021 Annual Report.
Opportunities are
unchanged from 2020.
On-target opportunities
are 125% of salary for
all Executive Directors.
The 2021 awards are
granted on 8 February
2021 in line with our
consistent course of
action.
In line with the Dutch
Corporate Governance
Code, awards will be
subject to a two-year
holding period in
addition to the current
three-year performance
period, resulting in a
total five-year period
from the date of grant.
Shareholding
Guidelines
The Guidelines
introduced in 2019
will remain unchanged;
the CEO has a
requirement of 300%
of salary; the other
Executive Directors
have a requirement of
150% of salary.
REMUNERATION REPORT
CONTINUED
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Financial statementsSustainability
OCI N.V.
Annual Report 2020
113
2021 Annual bonus performance measures
Performance measure and weighting
Financial
Metrics
(applicable
to all
Executive
Directors)
Cash Flow (40%)
Targets will be disclosed in the
2021 Annual Report
Sales Volumes (20%)
Targets will be disclosed in the
2021 Annual Report
HSE
(15)%
Lost Time Injury Rate (LTIR) 0.10
Total Recordable Incidents
Rate (TRIR) 0.36
Process Safety Incidents
Rate (PSIR) 0.70
Environmental Stewardship
/ EIR 0.40
Strategic
and non-
financial
A. El-Hoshy, CEO
Strategic target (12.5%): Focusing on successful
execution of the potential strategic opportunities
Developing Corporate Excellence and
Improvement Plans via Changes to Organizational
Design (12.5%)
H. Badrawi, CFO
Strategic target (12.5%): Focusing on successful
execution of the potential strategic opportunities
IT and Cybersecurity (6.25%): Ensure a coherent
and centrally managed IT organization at the
Group level that is able to effectively support the
business requirements
Trade and Overall Risk Management (6.25%)
M. de Vries, CLHCO
Organizational design, Performance management
and Leadership development (12.5%): Enabling
the development of OCI’s Operating model by
changing organizational design in combination
with direction clarity facilitating a high performing
culture.
Legal and Compliance (12.5%); Optimization of
legal dispute management and enhance ethics
and compliance awareness to maintain the
highest standards across the complete workforce.
Amendment of Long Term Incentive Plan
With support from external advisors, the Nomination and Remuneration Committee (N&RC)
reviewed the LTIP with particular focus on the performance measures. For the in-flight LTIP
Awards, vesting of the performance shares is dependent on OCI’s TSR performance, relative to
the TSR performance of the companies in our TSR peer group and no changes are proposed.
The N&RC believes that TSR remains an important performance measure to align executives’
remuneration to long-term shareholder value, demonstrating the Group’s absolute commitment
to delivering returns. However, the Board has determined that it would prefer to align part of the
long-term incentive to the strategic business priorities. Therefore, for future Awards, starting in
2021, relative TSR will continue to apply for 60% and for the remaining 40% the N&RC will select
additional performance measures out of a set of strategic initiatives including both Operational
Excellence measures and ESG priorities.
Operational excellence is a key driver for success and a translation of the strategic direction.
The ESG priorities are linked to our unique position to enable the energy transition and move
towards carbon neutrality as well as our value enhancing operational and environmental initiatives.
For each Award, the Committee will select one Operational Excellence measure with a weight of
15% and two ESG-priorities with a combined weight of 25%.
REMUNERATION REPORT
CONTINUED
100%
LTIP Performance measure
for inflight awards
Relative TSR
LTIP Performance measure
for future awards
60%
Relative TSR
Operational excellence
ESG - measures
25%
15%
Business performanceStrategy and value creation Risk management and compliance Other information
Corporate governance
Financial statementsSustainability
OCI N.V.
Annual Report 2020
114
REMUNERATION REPORT
CONTINUED
Strategic Initiatives
Measure Description
Operational Excellence:
Plant reliability Improvement of Asset Utilization = Onstream Efficiency x Capacity Efficiency
Operational Excellence:
Net Backs TBC]
Improvement of the costs associated with bringing the OCI products to the
market place, controlling sales and revenues
ESG: Decarbonization
roadmap Development, implementation and execution of decarbonization plan
ESG: Decarbonization
– quantitative reduction
target Reduction of our GHG emission on scope 1+2 and possibly 3
ESG : Sustainable Water
Management – roadmap Development, implementation and execution of a water management plan
ESG : Sustainable
Water Management –
quantitative reduction
target
Do not exceed the average [T-1+T-2+T-3] water intensity per ton produced on
average per year
ESG: ISO Certification Attain certification for energy / environmental management system (ISO14001,
ISO50001, etc.)
ESG-Index Rating (MSCI
and Sustainalytics) Attain improvement on MSCI ESG Index and Sustainalytics index
ESG: Diversity &
Inclusion
Increase percentage of women’s representation in senior positions and initiatives
to increase representation of minorities
ESG: Sustainable
Supplier Management
Compliance with OCI’s Business Partner Code of Conduct to ensure
responsible sourcing
The amendment of the performance measures for future Awards falls within the parameters set
out in OCI’s remuneration policy as published on our website. As such, there will be no further
vote on the Remuneration Policy; shareholders will continue to have an advisory vote on the
Remuneration Report.
The LTIP opportunity is unchanged and after vesting, the performance shares awarded will be
subject to a further 2-year holding period in line with the Dutch Corporate Governance Code
demonstrating a further commitment to the long-term sustainability of the Group.
The discretion to select the performance measures from the above set of strategic initiatives for
each performance period ensures the Committee can select performance measures that are best
aligned to the company’s strategic priorities and long-term interests. The Committee will ensure
the selected long-term performance measures do not overlap the performance measures for
the annual bonus. The performance measures selected for the 2021 Awards, as granted on 8
February 2021 are fully aligned to our strategic priorities, which include operational excellence,
business optimization, sustainable solutions and decarbonization. Please find further details on
these performance measures in the table below:
Performance measures 2021 PSU Awards
Measure Weight Target definition
Relative TSR
60%
Operational Excellence:
Plant reliability
15%
Improvement of Asset Utilization =
Onstream Efficiency x Capacity Efficiency
ESG: Decarbonization
15%
Development, implementation and execution of
decarbonization plan
ESG: Diversity
& Inclusion 10%
Increase percentage of women’s representation in senior
positions and initiatives to increase representation of minorities
The target level for OCI’s relative TSR performance are set out in the Policy. The target levels
for plant reliability, decarbonization and diversity & inclusion will be disclosed in the 2021
Remuneration Report.
Business performanceStrategy and value creation Risk management and compliance Other information
Corporate governance
Financial statementsSustainability
OCI N.V.
Annual Report 2020
115
REMUNERATION REPORT
CONTINUED
2021 Remuneration Scenarios
The Remuneration Committee conducts pay scenario modelling on an annual basis which
investigates pay-out quantum for Executive Directors under different performance scenarios. This
modelling is undertaken to ensure that the Remuneration Policy links directly with the performance
of OCI and therefore, is in the interests of shareholders.
In the event that specific short-term and long-term threshold performance targets are not
achieved, there will be no variable pay vesting or payout for Executive Directors for the relevant
period.
The charts below illustrates how much the current Executive Directors could receive under
different scenarios in 2021, assuming a constant share price (i.e. no appreciation) and no dividend
payments.
Element of Remuneration Details of assumptions
Fixed remuneration This comprises base salary with effect from 1 January 2021. The base salary is
inclusive of the 25% benefits allowance. The Executive Chair’s salary amounts
to $1,000,000, the CEO’s salary amounts to $1,250,000, the CFO’s salary
$1,150,000 and the salary of the CLHCO $560,000 pro-rated on an 80%
contract.
Annual Bonus Assumes maximum opportunity of 150% of salary for the CEO and 120% of
salary for the CFO and CLHCO.
For target, the scenario assumes 75% of annual base salary for the CEO and
60% of annual base salary for the CFO and CLHCO.
For threshold, the scenario assumes 30% of salary for the CEO and 24% of
salary for the CFO and CLHCO.
For minimum, the scenario assumes no pay-out of the bonus.
Performance
Share Unit Plan
Assumptions apply to all Executive Directors. There is a maximum opportunity
of 150% of target (187.5% of annual base salary) in conditional shares.
For target, the scenario assumes 125% of annual base salary for all Executive
Directors.
For threshold, the scenario assumes 25% of target for all Executive Directors.
For minimum, the scenario assumes 0% of target for all Executive Directors.
2021 Pay scenario analysis
Further to the pay scenario modelling conducted, the Committee concluded that the relationship
between the financial and strategic priorities of the company and the performance measures set
for the annual bonus as well as the PSP/PSU plan are adequate. The Committee also concluded
that the objectives of the Remuneration Policy and the underlying objectives of the company
are well served by the ratio between fixed and variable pay, which is for the CEO 62:38 in the
threshold scenario and 23:77 in the maximum scenario.
CFO
CLHCO (80%)
Minimum Threshold MaximumTarget
560
869
1,596
2,282
Minimum Threshold MaximumTarget
1,150
1,185
3,278
4,686
CEO
Minimum Threshold MaximumTarget
1,250
2,016
5,469
3,750
Salary Benets allowance
PSU
All gures $'000
Executive Chair
Minimum Threshold MaximumTarget
1,000
1,313
2,875
2,250
STI
Business performanceStrategy and value creation Risk management and compliance Other information
Corporate governance
Financial statementsSustainability
OCI N.V.
Annual Report 2020
116Introduction
This 2020 Annual Report comprises regulated information within the meaning of sections 1:1 and
5:25c of the Dutch Financial Supervision Act (
Wet op het financieel toezicht
).For the consolidated and OCI 2020 financial statements (
jaarrekening
) within the meaning of section 2:361 of the Dutch Civil Code, reference is made to the financial statements. OCI’s
Directors have signed the 2020 financial statements in line with section 2:101 paragraph 2 of the
Dutch Civil Code.
Corporate governance statement
As referred to in article 2a of the Decree laying down additional requirements for annual reports
(
Besluit inhoud bestuursverslag
) effective 1 January 2018 (the AR Decree
), OCI is required to
make a statement on corporate governance.
Information required to be included in the corporate governance statement as described in articles
3, 3a and 3b of the AR Decree can be found in the following sections of this Annual Report:
• information concerning compliance with the Code, as required by article 3 of the AR Decree,
can be found in the section Compliance with the Code on page 103;
• information concerning OCI’s risk management and control frameworks relating to the financial
reporting process, as required by article 3a(a) of the AR Decree, can be found in the section
Risk Management beginning on page 77;
• information regarding the functioning of the GM, and the authority and rights of OCI’s
shareholders, as required by article 3a(b) of the AR Decree, can be found in the section
Shareholders’ rights and meetings on page 102;
• information regarding the composition and functioning of OCI's Board and its Committees, as
required by article 3a(c) of the AR Decree, can be found beginning on page 91;
• information regarding the diversity policy concerning the composition of the Board, as required
by article 3a(d) of the AR Decree, can be found in the sections Board composition and
independence and Diversity & Inclusion on pages 98 and 99; and
• information concerning the inclusion of the information required by the Decree Article 10
Takeover Directive (
Besluit artikel 10 overnamerichtlijn
), as required by article 3b of the AR Decree, can be found in the section Decree Article 10 Takeover Directive on page 103.
The Code was last amended with effect from 1 January 2017 and is available at the website of the
Corporate Governance Monitoring Committee (http://www.mccg.nl).
In control statement
The Board is responsible for the design, implementation and operation of OCI’s internal risk
management and control systems. In discharging this responsibility, the Board has made an
assessment of the effectiveness of OCI’s internal control and risk management systems.
Based on this assessment and to the best of its knowledge and belief, the Board states that:
• there are no material failures in the effectiveness of OCI’s internal risk management and control
systems;
• OCI’s internal risk management and control systems provide reasonable assurance that the
Annual Report does not contain any errors of material importance;
• based on the current state of affairs, it is justified that the financial reporting is prepared on a
going concern basis; and
• there are no material risks or uncertainties that could reasonably be expected to have a material
adverse effect on the continuity of OCI’s enterprise in the coming twelve months.
The above statements do not imply that our systems and procedures provide absolute assurance
as to the realization of our operational and strategic business objectives, or that they can prevent
all misstatements, inaccuracies, errors, fraud and non-compliances with legislation, rules and
regulations.
Directors’ statement pursuant to article 5:25c of the Dutch Financial Supervision Act
In accordance with Article 5:25c of the Dutch Financial Supervision Act (
Wet op het financieel
toezicht
), the Directors declare that to the best of their knowledge:
• the 2020 financial statements (
jaarrekening
) provide a true and fair view of the assets, liabilities, financial position and results of OCI and its subsidiaries included in the consolidated
statements; and
• the Board Report (
bestuursverslag
) provides a true and fair view of the situation as at 31 December 2020, and of OCI’s and its group companies’ state of affairs for the financial year
2020, as well as the principal risks and uncertainties that OCI faces.
DECLARATIONS
Business performanceStrategy and value creation Risk management and compliance Other information
Corporate governance
Financial statementsSustainability
OCI N.V.
Annual Report 2020
117Non-Financial Statement pursuant to Directive 2014/95/EU
Directive 2014/95/EU requires large companies to disclose non-financial information. This Directive
has been implemented into Dutch law through the Decree disclosure of non-financial information
(
Besluit bekendmaking niet-financiële informatie
) (the NF Disclosure Decree
).
Pursuant to article 2 of the NF Disclosure Decree, OCI has included the information included in
article 3 of the NF Disclosure Decree in the following sections of this Annual Report:
• a description of OCI’s business model is included on page 19;
• a description, including applied procedures and the results of its policy in relation to:
Compliance on page 87;
• the principal risks related to the policy and how the risks are managed as described throughout
the sustainability and ERM sections of this Annual Report; and
• the non-financial performance indicators which are relevant for OCI’s business activities are
described on pages 29-76.
Amsterdam, the Netherlands, 22 March 2021
The Board
Michael Bennett
Nassef Sawiris
Ahmed El-Hoshy
Hassan Badrawi
Maud de Vries
Sipko Schat
Jérôme Guiraud
Gregory Heckman
Robert Jan van de Kraats
Anja Montijn-Groenewoud
David Welch
Dod Fraser
Heike van de Kerkhof
DECLARATIONS
CONTINUED
Business performanceStrategy and value creation Risk management and compliance Other information
Corporate governance
Financial statementsSustainability
OCI N.V.
Annual Report 2020
118
OCI N.V.
Annual Report 2020
119Financial
statements
OCI N.V.
Annual Report 2020
119120 Consolidated Statement
of Financial Position
122 Consolidated Statement
of Profit or Loss and Other
Comprehensive Income
123 Consolidated Statement
of Changes in Equity
124 Consolidated Statement
of Cash Flows
126 Notes to the Consolidated
Financial Statements
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
120CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT
$ millions Note
31 December
2020
31 December
2019
Assets
Non-current assets
Property, plant and equipment (7) 6,244.3 6,570.6
Right-of-use assets (7) 279.4 277.5
Goodwill and other intangible assets (8) 486.5 599.8
Trade and other receivables (9) 3.5 4.1
Equity-accounted investees (10) 468.7 506.9
Financial assets at fair value through other comprehensive income (11) 30.0 33.4
Deferred tax assets (12) 0.8 6.5
Total non-current assets 7,513.2 7,998.8
Current assets
Inventories (13) 293.8 308.7
Trade and other receivables (9) 600.9 508.4
Income tax receivables (12) 2.8 3.2
Cash and cash equivalents (14) 686.3 600.5
Total current assets 1,583.8 1,420.8
Total assets 9,097.0 9,419.6
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
121CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONTINUED
AS AT
$ millions Note
31 December
2020
31 December
2019
Equity
Share capital (15) 5.6 5.6
Share premium (15) 6,316.3 6,316.3
Reserves (16) 237.8 )
(338.4 )
(Retained earnings 4,726.6 )
(4,851.8 )
(Equity attributable to owners of the Company 1,131.7 1,357.5
Non-controlling interests (17) 1,540.1 1,461.2
Total equity 2,671.8 2,818.7
Liabilities
Non-current liabilities
Loans and borrowings (18) 4,226.9 4,392.7
Lease obligations (19) 248.6 244.3
Trade and other payables (20) 25.7 30.7
Provisions (21) 3.0 2.8
Deferred tax liabilities (12) 515.5 490.2
Total non-current liabilities 5,019.7 5,160.7
Current liabilities
Loans and borrowings (18) 189.7 269.6
Lease obligations (19) 43.6 41.0
Trade and other payables (20) 1,003.6 991.3
Provisions (21) 158.3 129.5
Income tax payables (12) 10.3 8.8
Total current liabilities 1,405.5 1,440.2
Total liabilities 6,425.2 6,600.9
Total equity and liabilities 9,097.0 9,419.6
The notes on pages 126 to 169 are an integral part of these consolidated financial statements.
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
122CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEARS ENDED 31 DECEMBER
$ millions Note
2020 2019
Revenue (27) 3,474.1 3,031.7
Cost of sales (22) 2,708.9 )
(3,062.0 )
(Gross profit 412.1 322.8
Other income (23) 17.6 5.8
Selling, general and administrative expenses (22) 219.1 )
(219.3 )
(Other expenses (24) 4.5 )
(23.4 )
(Operating profit 187.0 105.0
Finance income (25) 212.5 60.8
Finance cost (25) 387.7 )
(412.4 )
(Net finance cost 326.9 )
(25)
(199.9 )
(Income from equity-accounted investees (net of tax) (10) 56.6 )
(36.7 )
(Profit / (loss) before income tax 278.5 )
(49.6 )
(Income tax (12) 21.7 )
(44.5 )
(Net profit / (loss) 300.2 )
(94.1 )
(Other comprehensive income:
Items that are or may be reclassified subsequently to profit or loss
Movement in hedge reserve (16) 5.9 0.2
Currency translation differences (16) 4.6
(146.9 )
Currency translation differences from equity-accounted investees (10) 1.6 (0.2 )
Items that will not be reclassified to profit or loss
Changes in the fair value of financial assets at fair value through other comprehensive income (16) 3.4 )
(3.7 )
(Other comprehensive income, net of tax 1.2
(143.1 )
Total comprehensive income 299.0 )
(237.2 )
(Profit / (loss) attributable to:
Owners of the Company 334.7 )
(177.7 )
(Non-controlling interests (17) 83.6 34.5
Net profit / (loss) 300.2 )
(94.1 )
(Total comprehensive income attributable to:
Owners of the Company (282.1 ) (329.9 )
Non-controlling interests (17) 44.9 30.9
Total comprehensive income 299.0 )
(237.2 )
((Loss) / earnings per share (in USD)
Basic (loss) / earnings per share (26) 1.598 )
(0.847 )
(Diluted (loss) / earnings per share (26) 1.598 )
(0.847 )
(The notes on pages 126 to 169 are an integral part of these consolidated financial statements.
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
123CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
$ millions Note
Share capital
(15)
Share premium
(15)
Reserves
(16)
Retained
earnings
(15)
Equity attributable
to owners of the
Company
Non-controlling
interests
(17)
Total
equity
Balance at 1 January 2019 5.6 6,316.3 (249.0 ) (5,065.6 ) 1,007.3 469.8 1,477.1
Net profit / (loss) - - - (334.7 ) (334.7 ) 34.5 (300.2 )
Other comprehensive income
Total comprehensive income - - 4.8 (334.7 ) (329.9 ) 30.9 (299.0 )
Impact difference in profit sharing non-controlling interests (17) - - - - - 10.5 10.5
Dividend to non-controlling interests (17) - - - - - (143.3 ) (143.3 )
Treasury shares sold / delivered (16) - - 7.7 (7.7 ) - - -
Treasury shares acquired (16) - - (1.3 ) - (1.3 ) - (1.3 )
Business combination Fertiglobe (15) - - - 674.8 674.8 1,093.3 1,768.1
Share-based payments (15) - - - 6.6 6.6 - 6.6
Balance at 31 December 2019
Net profit / (loss) - - - (177.7 ) (177.7 ) 83.6 (94.1 )
Other comprehensive income
Total comprehensive income
Impact difference in profit sharing non-controlling interests (17) - - - - - 17.4 17.4
Dividend to non-controlling interests (17) - - - - - (49.2 ) (49.2 )
Reversal of dividend to non-controlling interests (17) - - - - - 125.4 125.4
Treasury shares sold / delivered (16) - - 3.8 (3.8 ) - - -
Business combination Fertiglobe (15) - - - 48.3 48.3 (59.6 ) (11.3 )
Share-based payments (15) - - - 8.0 8.0 - 8.0
Balance at 31 December 2020
The notes on pages126 to 169 are an integral part of these consolidated financial statements.
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Annual Report 2020
124CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED 31 DECEMBER
$ millions Note
2020 2019
Net profit / (loss) 300.2 )
(94.1 )
(Adjustments for:
Depreciation and amortization (7), (8) 592.2 544.7
Interest income (25) 5.9 )
(4.4 )
(Interest expense (25) 307.5 311.8
Net foreign exchange loss and others (25) 21.0
(103.2 )
Fertiglobe business combination -
(13.3 )
Share in income of equity-accounted investees (10) 36.7 56.6
Equity-settled share-based payment transactions (15) 8.0 6.6
Impact difference in profit-sharing non-controlling interests (15) 17.4 10.5
Income tax expense (12) 44.5 21.7
Changes in:
Inventories (13) 18.2 (50.0 )
Trade and other receivables (9) 90.7
(120.4 )
Trade and other payables (20) 214.2 (42.4 )
Provisions (21) 27.6 0.6
Cash flows:
Interest paid 274.1 )
(283.5 )
(Lease interest paid (19) -
(8.6 )
Interest received 4.4 5.8
Income taxes paid (12) 59.9 )
(25.4 )
(Cash flow from / (used in) operating activities 617.8 337.5
Investments in property, plant and equipment (7) 300.0 )
(262.6 )
(Investments in intangibles -
(0.6 )
Cash acquired in business combination (2.2.1) - 45.8
Dividends from equity-accounted investees (10) 3.0 1.6
Cash flow from / (used in) investing activities 252.6 )
(260.2 )
(
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Annual Report 2020
125CONSOLIDATED STATEMENT OF CASH FLOWS
CONTINUED
FOR THE YEARS ENDED 31 DECEMBER
$ millions Note
2020 2019
Purchase of treasury shares (16) - (0.7 )
Proceeds from borrowings (18) 2,070.4 1,765.5
Repayment of borrowings (18) 1,654.4 )
(2,396.0 )
(Newly incurred transaction costs / call premium (18) 19.0 )
(51.2 )
(Payment of lease obligations (19) 30.1 )
(37.3 )
(Dividends paid to non-controlling interests (15), (17) 6.1 )
(43.2 )
(Settlement FX derivatives 45.6 -
Net debt settlement business combination Fertiglobe (2.2.1) 166.8 -
Cash flows from / (used in) financing activities 55.2
(244.9 )
Net cash flow 112.7 140.1
Net increase / (decrease) in cash and cash equivalents 112.7 140.1
Cash and cash equivalents at 1 January 600.5 460.7
Effect of exchange rate fluctuations on cash held 0.3 )
(26.9 )
(Cash and cash equivalents at 31 December 686.3 600.5
For non-cash movements in loans and borrowings and lease obligations, reference is made to notes 18 and 19, respectively.
The notes on pages 126 to 169 are an integral part of these consolidated financial statements.
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Annual Report 2020
126NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
1. General
incorporated under Dutch law, with its head office located at Honthorststraat 19, Amsterdam, the
2013. The consolidated financial statements comprise the financial statements of the Company, its
subsidiaries (together referred to as the ‘Group’) and the Group’s interests in associates and joint
ventures.
2. Basis of preparation
2.1 General
The consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards as endorsed by the European Union (IFRS-EU).
The consolidated financial statements have been prepared on the historical cost convention, except
when otherwise indicated.
The financial year of the Group commences on 1 January and ends on 31 December.
The Company’s functional currency is the Euro (‘EUR’). The group presentation currency is the US dollar,
as the Group’s major foreign operations have the US dollar as their functional currency. All values are
rounded to the nearest tenth of a million (in millions of USD), except when stated otherwise.
These financial statements have been authorized for issue by the Company’s Board of Directors on
22 March 2021. These consolidated financial statements are subject to adoption by the Annual General
Meeting of Shareholders.
2.2 Business combinations
2.2.1 Fertiglobe business combination
On 30 September 2019, the Group and Abu Dhabi National Oil Company (“ADNOC”) completed a
transaction to combine ADNOC’s fertilizer business into OCI’s Middle East and North Africa (“OCI
MENA”) nitrogen fertilizer platform.
As part of the transaction, Fertiglobe, a subsidiary of the Group obtained OCI MENA under common
control and 100% of the voting powers and economic returns from Ruwais Fertilizer Industries Ltd.
(“Fertil”), a previously wholly owned subsidiary of ADNOC. Fertil has been consolidated by the Group
from 30 September 2019. Fertil is based out of the Emirate of Abu Dhabi, United Arab Emirates and is
engaged in processing feedstock gas to produce nitrogen fertilizers. In exchange, the Group transferred
42% of the total share capital of Fertiglobe to ADNOC. With the acquisition of Fertil, Fertiglobe will
become the largest producer of nitrogen fertilizers in the MENA region.
The accounting for this business combination has been disclosed in our 2019 consolidated financial
statements. As previously disclosed the accounting for this business combination at the end of 2019
was still provisional in respect of the accounting for the net debt settlement (‘post-closing adjustment’).
On 31 March 2020 the Company signed a final settlement with ADNOC for the post-closing adjustment
which is considered to be an adjustment to the consideration transferred in this transaction. In our
2019 consolidated financial statements a settlement receivable was included of USD 49.7 million (which
represented the uncontested amount at the time). In the final settlement a compensation of USD 178.0
million has been agreed with ADNOC as post-closing adjustment (of which USD 166.8 million was
received in cash).
The measurement period adjustments recognized, compared to the 2019 consolidated financial
statements, resulted in a decrease of goodwill (USD 115.1 million), trade and other receivables (USD
49.7 million) and non-controlling interests (USD 11.3 million) and an increase of cash (USD 166.8
million), which resulted in the identification of a gain on this transaction of USD 13.3 million.
Goodwill arising from the business combination has been recognized as follows:
$ millions
Consideration transferred 1,057.5
NCI, based on their proportionate interest in the recognized amounts of the assets and
liabilities 710.6
Fair value of identifiable net assets (1,603.4)
Additional consideration received (178.0)
Gain on transaction*
(13.3)
* Due to the final post-completion settlement between the Company and ADNOC, the total
consideration transferred (USD1,590.1 million) is less than the fair value of the identifiable net assets
(USD1,603.4 million), resulting in a gain on purchase of USD 13.3 million which is recorded in the profit
or loss.
As per 30 September 2020, the Company finalized the Purchase Price Allocation (‘PPA’). The
finalization of the PPA did not result in any changes to the previously reported numbers for this business
combination.
As part of the transaction, ADNOC and OCI agreed on several adjustments in the consideration for
indemnities related to potential tax and legal exposures for both parties. Such indemnities could lead
to a future settlement between both parties if such items materialize. The fair value of these contingent
consideration arrangements as per acquisition date was assessed based on the estimated impact
and likelihood (which are mostly supported by third party opinions). During the remeasurement period,
the aggregate fair value of the contingent consideration assets and liabilities was assessed to be zero.
Reference is made to note 21.
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Annual Report 2020
127NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
2.2.2 Completed Demerger of the Engineering & Construction Business in 2015
OCI demerged the Company’s Engineering & Construction business in March 2015 (‘the Demerger’).
The ultimate parent company holding the demerged Engineering & Construction activities and that
became listed on the Cairo and Dubai stock exchanges directly after the demerger is Orascom
Construction PLC (’OC’). The Demerger was completed on 7 March 2015.
Ongoing relationship between OCI N.V. and Orascom Construction PLC
After the Demerger, OCI and OC each operate as separately listed companies.
Construction contracts
Subsidiaries of OC and OCI are still party to continuing commercial arrangements.
Conditional sale agreement
Orascom Construction Industries S.A.E (‘OCI S.A.E.’) was the former parent company of the OCI
Group, which was replaced by OCI N.V. in 2013 and was delisted from the Egyptian Stock Exchange in
2016. OCI S.A.E. acts as the sub holding of several operating fertilizer companies of OCI NV. At the time
of the demerger, OCI S.A.E. also held certain construction activities that could not be legally transferred
to Orascom Construction PLC as part of the Demerger due to legal, regulatory, or other considerations.
In order to have the Engineering & Construction businesses derecognized from the OCI N.V.
consolidated financial statements, a conditional sale agreement was entered into between the OCI
Group and the OC Group. The agreement stipulates that the management of construction activities, as
well as the economic effect of all related risks and rewards (including the right to any dividends), would
be passed from OCI SAE to OC effective 30 September 2014 until OCI SAE’s construction activities are
terminated, or until OCI SAE’s construction activities are demerged into a separate construction entity
called ‘Construction Egypt’ that is then transferred to OC.
In addition to management, OC also received the right to vote on the board of directors of OCI S.A.E.
in matters related to the construction business. This transfer of economic benefits, liabilities and rights
will remain in force until the transfer of the ‘Construction Egypt’ shares have been legally formalized. Any
new awarded projects will be sought through a wholly-owned subsidiary of OC.
Tax indemnity agreement
On 6 February 2015, OC and OCI S.A.E. entered into a tax indemnity agreement. The agreement sets
out each party’s obligations in respect of the tax claim lodged by the tax authorities in Egypt relating to
the sale of the OCI S.A.E.’s cement business to Lafarge SA in 2007 (further reference is made to note
28). The parties have agreed to equally split any liability incurred by OCI S.A.E. in relation to the Tax
Claim (including the costs of dealing with the Tax Claim). In addition, to the extent that any recoveries
are made in relation to the tax claim, including interest received on the funds, these will be shared
between the parties on a 50%/50% basis (excluding the amount of EGP 1.9 billion (refund received in
March 2015) for which it was announced that the rights will be transferred to Tahya Misr social fund in
Egypt).
2.3 COVID-19 impact
The outbreak of COVID-19 continues to impact the global economy and markets. However, our
business operations including our global supply chain and distribution channels have continued without
interruption throughout the pandemic to-date, as our industries and our products have been designated
as essential by the respective governments of each of our markets to ensure the uninterrupted supply
of goods and other essential products. We noted decreasing selling prices for all our products over the
course of the second quarter of 2020 and recovery of selling prices over the course of the third and
fourth quarter of 2020, on the back of increased global energy prices, driving lower global operating
rates and resulting in lower supply. Based on the recent strong recovery of the market, we expect this
will not impact the long term outlook of our business and the valuation of our assets. Global urea and
ammonia prices have increased by 30% in the first two months of 2021 while the outlook for Methanol
continues to improve, Methanol prices have almost tripled since mid-2020 due to tight balance in the
market as a result of shutdown of high-cost Methanol capacity and healthy industrial demand.
At the outset of the COVID-19 outbreak, we established an internal COVID-19 taskforce to ensure
safety of our employees and business continuity. OCI applied strict protective measures, including
sanitation, personal protection equipment, social distancing and thermal testing prior to accessing any
group locations. The status of returning to workplace differs per jurisdiction. Currently the majority of
the locations are now at 50%-70% employee occupancy rates. As our plants are heavily automated,
essential on-site operating and logistics personnel can be limited and administrative and operational
support personnel have worked remotely in order to maintain social distancing following governmental
guidelines.
Although the long-term effects of COVID-19 are still unclear, our current outlook is that our financial and
operating performance remains solid. We have operated our business in a remote working environment
and could continue to do so for an extended period of time, if necessary. Developments in each
jurisdiction are being closely monitored and protocols are flexible to allow for rapid adjustments as
needed. The impressive resilience of our staff throughout the period gives all local management teams
confidence to revert to a work-from-home policy again if needed, without interruptions to our operations
and supply chain.
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Other informationSustainability OCI N.V.
Annual Report 2020
128NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
3. Summary of significant accounting policies
The Group has applied the accounting policies set out in note 3 consistently over both periods
presented in these consolidated financial statements.
3.1 Consolidation
The consolidated financial statements include the financial statements of OCI, its subsidiaries and the
Group’s interests in associates and joint ventures.
Subsidiaries
Subsidiaries are all companies to which OCI is exposed or has rights to variable returns from its
involvement with the investee and has the ability to affect those returns through its control over the
investee, generally accompanying a shareholding of more than half of the shares issued and related
voting power. Subsidiaries are fully consolidated from the date that control commences until the date
that control ceases. When the Group ceases to have control over a subsidiary, it derecognizes the
assets and liabilities of the subsidiary, and any related non-controlling interests and other components of
equity. Any investment retained in the former subsidiary is recognized at fair value. The fair value shall be
regarded as the fair value on initial recognition of a financial asset or, when appropriate, the cost on initial
recognition of an investment in an associate or joint venture. Any resulting gain or loss is recognized in
profit or loss including related cumulative translation adjustments accumulated in other comprehensive
income. If it becomes an associate or joint venture, the interest retained is subsequently measured in
accordance with the equity method. The principal subsidiaries are listed in note 34.
Transactions eliminated in the consolidated financial statements
Intra-group balances and transactions, and any unrealized income and expenses arising from intra-
group transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains
arising from transactions with equity-accounted investees are eliminated against the investment to the
extent of the Group’s interest in the investees. Unrealized losses are eliminated in the same way as
unrealized gains, but only to the extent that there is no evidence of impairment.
Non-controlling interests
Non-controlling interests is presented as a separate component in equity. ‘Profit or loss’ and ‘Total
comprehensive income’ attributable to the non-controlling interests are presented as a separate line
item in the consolidated statement of profit or loss and other comprehensive income. Non-controlling
interests is measured at its proportionate share of the acquiree’s identifiable net assets at the balance
sheet date. Changes in Group’s ownership interest in a subsidiary that do not result in a loss of control
are accounted for as equity transactions.
3.2 Equity-accounted investees
Associates
Associates are those companies in which the Group exercises significant influence, but does not have
control over the financial and operating policies, and are presumed to exist when the Group holds
20% to 50% of the shareholding and related voting rights of the other entity. Associates are accounted
for under the equity method. The Group’s share of profit or loss of an associate is recognized in profit
or loss from the date when significant influence begins up to the date when that influence ceases.
Investments in associates with negative shareholder’s equity are impaired and a provision for its losses
is recognized only if the Group has a legal or constructive obligation to cover the losses. Equity changes
in investees accounted for under the equity method that do not result from profit or loss are recognized
in other comprehensive income. Unrealized gains on transactions between the Group and its associates
are eliminated to the extent of the Group’s interest in associates. Unrealized losses are also eliminated
unless the transaction provides evidence of an impairment of the asset transferred. Unrealized gains on
transactions between two associates are not eliminated.
Joint ventures
Investments in joint arrangements are classified as either joint ventures or joint operations depending on
the contractual rights and obligations of each investor. Those joint arrangements that are assessed as
joint ventures are accounted for using the equity method. Joint operations are accounted for using line
by line accounting.
Joint ventures are accounted for under the equity method. Under the equity method of accounting,
interests in joint ventures are initially recognized at cost and adjusted subsequently for the Group’s share
in the post-acquisition profit or losses and movements in comprehensive income. When the Group’s
share of losses in a joint venture equals or exceeds its interest in the joint venture (which includes any
long-term interest that, in substance, forms part of the Group’s net investment in joint ventures), the
Group does not recognize further losses, unless it has incurred obligations or made payments on behalf
of the joint venture.
3.3 Business combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition is
measured as the aggregate of the consideration transferred, measured at acquisition date, fair value of
the assets and liabilities assumed and the amount of any non-controlling interests in the acquiree. For
each business combination, the Group elects whether to measure the non-controlling interests in the
acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-
related costs are expensed as incurred and included in administrative expenses.
When the Group acquires a business, it assesses the classification of particular financial assets and
financial liabilities assumed as, at fair value through profit or loss, or at amortized cost or as a financial
asset measured at fair value through other comprehensive income. The Group makes an assessment of
whether embedded derivatives of the acquiree should be separated from their host contracts.
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Other informationSustainability OCI N.V.
Annual Report 2020
129NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
3. Summary of significant accounting policies
(continued)
If the business combination is achieved in stages, the previously held equity interest is remeasured
at its acquisition date fair value and any resulting gain or loss is recognized in profit or loss or other
comprehensive income, as appropriate.
The consideration transferred in exchange for the acquiree includes any asset or liability resulting
from a contingent consideration arrangement. The Group recognizes the acquisition-date fair value of
contingent consideration as part of the consideration transferred in exchange for the acquiree.
Changes in the fair value of consideration that are not measurement period adjustments shall be
adjusted as follows:
• Contingent consideration classified as equity shall not be remeasured.
• Other contingent consideration shall be measured at fair value with changes recognized in profit or loss.
3.4 Foreign currency
Foreign currency transactions
The financial statements of subsidiaries and joint operations are prepared in the currencies which
are determined based on the primary economic environment in which they operate (‘the functional
currency’). Transactions in currencies other than the functional currency are recorded at the rates of
exchange prevailing on the transaction dates. At each balance sheet date, monetary items denominated
in foreign currencies are revalued into the entity’s functional currency at the then prevailing closing-rates.
Exchange differences arising on the settlement and translation of monetary items are included in profit
or loss for the period except when deferred to other comprehensive income for financial assets at fair
value through other comprehensive income and the effective part of qualifying cash flow hedges.
Foreign currency translation
Upon consolidation, the assets and liabilities of subsidiaries with a functional currency other than
the US dollars are translated into US dollars using the exchange rates prevailing at the balance
sheet date. Income and expense items are translated using exchange rates prevailing at the date of
the transactions. Investments in joint ventures and associates with a functional currency other than
the US dollars are translated into US dollars using exchange rates prevailing on the balance sheet
date. Exchange rate differences arising during consolidation and on the translation of investments
in subsidiaries, joint arrangements and associates are included in other comprehensive income,
as ‘Currency translation differences’. When a foreign operation is (partly) disposed of or sold, (the
proportionate share of) the related currency translation differences that were recorded in other
comprehensive income are recycled to profit or loss as part of the gain or loss on disposal or sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign subsidiary are considered as
assets and liabilities denominated in the functional currency of the foreign subsidiary.
3.5 Financial instruments
Financial assets
IFRS 9 contains three principal classification categories for financial assets: measured at amortized
cost, at fair value through profit or loss (‘FVTPL’) and at fair value through other comprehensive income
(‘FVOCI’). The classification of financial assets under IFRS 9 is generally based on the business model in
which a financial asset is managed and its contractual cash flow characteristics.
Amortized cost
Trade and other receivables are held to collect contractual cash flows and are expected to give
rise to cash flows representing solely payments of principal and interest. The Group analyzed the
contractual cash flow characteristics of those instruments and concluded that they meet the ‘hold-to-
collect’ business model criteria for amortized cost measurement. Interest income from these assets is
included in finance income using the effective interest rate method. Any gain or loss on derecognition is
recognized directly in profit or loss.
The Group sells certain trade receivables under a securitization agreement to a third party. For these
selected debtors the Group will use the ‘hold-to-collect-and-sell business model’ as defined under IFRS
9 and will measure these receivables going forward at FVOCI.
Fair value through profit or loss (‘FVTPL’)
Derivative financial instruments held by the Group are classified in the category FVTPL, unless the
instrument is designated in a hedge relationship and the hedge meets the requirements for hedge
accounting. Under IFRS 9, derivatives embedded in contracts where the host is a financial asset in
the scope of the standard are never separated. Instead, the hybrid financial instrument as a whole is
assessed for classification.
Fair value through other comprehensive income (‘FVOCI’)
Equity investments, previously recognized as available-for-sale assets, are measured at FVOCI, based
on the irrevocable election made by the Group. The Group elected this approach as these investments
are not held for trading. Movements in the carrying amount are recognized in other comprehensive
income, except for the recognition of impairment gains and losses, interest income and foreign
exchange gains and losses which are recognized in the profit or loss. On derecognition the cumulative
gain or loss recognized in other comprehensive income is not reclassified from equity to profit or loss.
Dividend income is recognized in profit or loss when the Group’s right to receive payment is established.
Gas purchase contracts
The Group has purchase contracts in place to procure natural gas for its production activities. These
contracts are not accounted for as financial instruments as they are excluded for the scope of IFRS 9
through the “own use exemption”. The own use exemption applies to contracts that are entered into
and continue to be held for the receipt of a non-financial item in accordance with the Group’s expected
purchase, sale or usage requirements.
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Annual Report 2020
130NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
3. Summary of significant accounting policies
(continued)
Financial liabilities
Financial liabilities, like loans and borrowings and trade and other payables, are measured at amortized
cost, unless the financial liability:
• is a derivative at FVTPL;
• arose from the transfer of a financial assets that does not qualify for derecognition or if the continuing
involvement approach applies;
• is a financial guarantee contract;
• is a commitment to provide a loan at a below-market interest rate; and
• is a contingent consideration resulting from a business combination to which IFRS 3 applies,
measured at FVTPL.
Impairment
The new impairment model requires the recognition of impairment provisions based on expected
credit losses (ECL) rather than only incurred credit losses as is the case under IAS 39. Based on the
assessment undertaken on historical data, there’s limited impact from the expected credit loss model.
The Group will evaluate any possible impact going forward. For the assessment of loss allowance
for expected credit losses, a simplified model for trade receivables is applied. The loss allowance is
measured at initial recognition and throughout the life of the receivable at an amount equal to lifetime
ECL. They are estimated based on the present value of all cash shortfalls over the remaining expected
life of the financial asset, i.e., the difference between:
• the contractual cash flows that are due to an entity under the contract; and
• the cash flows that the holder expects to receive.
In order to assess the lifetime ECLs for trade receivables, both historic credit losses experience and
forward-looking information is assessed.
For other receivables (and other financial assets) the Group measures the loss allowance at an amount
equal to the lifetime ECLs if the credit risk on that financial instrument has increased significantly since
initial recognition.
If at the reporting date, the credit risk of other receivables has not increased significantly since initial
recognition, the Group measures the loss allowance for that financial instrument at an amount equal to
12-month ECL.
3.6 Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with original maturities of
three months or less from the acquisition date (original maturity) that are subject to an insignificant
risk of changes in their fair value and are used by the Group in the management of its short-term
commitments. Restricted cash comprises cash balances where specific restrictions exist on the
Company’s ability to use this cash. Restricted cash includes cash deposited as collateral for letters
of credit issued by the Company. Restricted funds include bank balances reserved by the lending
institution for installments of loan payments to be made in the near future.
3.7 Share capital
Ordinary shares are classified as equity. Share premium is the excess amount received over the par
value of the shares. Incremental costs directly attributable to the issue of new shares are recognized
in equity as a deduction, net of tax, from the proceeds. When ordinary shares are repurchased, the
amount of the consideration paid, which includes directly attributable costs, net of tax effects, is
recognized as a deduction from ‘Reserves’. Repurchased shares are classified as treasury shares
and are presented in ‘Reserves’. When treasury shares are sold or reissued subsequently, the
amount received is recognized as an increase in ‘Reserves’, and the resulting surplus or deficit on the
transaction is presented in share premium.
3.8 Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation and any
impairment. Cost includes expenditure that is directly attributable to the acquisition of the asset. The
cost of self-constructed assets includes cost of material, direct labour, other directly attributable cost
incurred to bring the asset ready to its intended use, cost of asset retirement obligations and any
capitalized borrowing cost.
Purchased software that is integral to the functionality of the related equipment is capitalized as part
of that equipment. When parts of property, plant and equipment have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment (calculated as the difference
between the net proceeds from disposal and the carrying amount of the item) is recognized in profit
or loss. Subsequent expenditures are capitalized only when it is probable that the future economic
benefits associated with the expenditure will flow to the Group. Ongoing repairs and maintenance
costs are expensed as incurred. Spare parts of property, plant and equipment are recognized under
property, plant and equipment if the average turn-over exceeds 12 months or more, otherwise they are
recognized within inventories.
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Other informationSustainability OCI N.V.
Annual Report 2020
131NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
3. Summary of significant accounting policies
(continued)
Property, plant and equipment under construction
Expenditures incurred for purchasing and constructing property, plant and equipment are initially
recorded as ‘under construction’ until the asset is completed and becomes ready for use. Upon
the completion of the assets, the recognized costs are reclassified from ‘under construction’ to its
final category of property, plant and equipment. Assets under construction are not depreciated and
measured at cost less any impairment losses.
Depreciation
Items of property, plant and equipment are depreciated on a straight-line basis through profit or loss
over the estimated useful lives of each component, taking into account any residual values. Land is not
depreciated.
Items of property, plant and equipment are depreciated from the date that they are installed and are
ready for use, or in respect of internally constructed assets, from the date that the asset is completed
and ready for use.
The estimated useful lives for items of property, plant and
equipment are as follows: Years
Buildings 10 - 50
Plant and equipment 5 - 25
Fixtures and fittings 3 - 10
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted
if necessary by the Group.
Borrowing costs
Borrowing costs attributable to the acquisition, construction or production of assets that necessarily
take a substantial period of time to get ready for their intended use or sale, are recognized as part of the
cost of those assets. All other borrowing costs are recognized as ‘Finance cost’ in the period in which
they are incurred.
3.9 Goodwill and other intangible assets
Goodwill
Goodwill represents the excess of purchase price and related costs over the value assigned to the
Groups’ share of identifiable assets acquired and liabilities assumed of businesses acquired that were
directly attributable to the legal entities comprising the Group. If the fair value of the net assets acquired
is in excess of the aggregate consideration transferred, the gain is recognized in profit or loss.
Goodwill on acquisition of entities that qualify as subsidiaries is presented under ‘Goodwill and intangible
assets’. Goodwill on acquisitions of entities that qualify as associates or joint ventures is included in
‘Equity-accounted investees’. Goodwill on acquisition of subsidiaries is allocated to cash-generating
units for the purpose of impairment testing. The allocation is made to those cash-generating units or
group of units that are expected to benefit from the business combination through which the goodwill
arose, based on past experience.
Goodwill is initially measured at cost. After initial recognition, goodwill is measured at cost less any
impairment losses. Goodwill is tested annually for impairment; an impairment loss is recognized for
the amount by which the cash-generating unit’s carrying amount exceeds its recoverable amount. The
recoverable amount of the cash-generating unit is determined by the higher of its fair value less cost to
sell and its value in use. Impairment losses on goodwill are not reversed. Gains or losses on the disposal
of an entity include the carrying amount of goodwill related to the entity sold. All other expenditures on
internally generated goodwill and other intangible assets is recognized in profit or loss as incurred.
Other intangible assets
Other intangible assets with a finite useful life (licenses, customer relations, brand names and other
rights that are acquired separately or through business combinations) are amortized on a straight-
line basis in profit or loss over their estimated useful lives taking into account any residual value and
impairment losses, from the date that they are available for use.
The estimated useful lives of intangible assets are as follows: Years
Licenses and trade names 3 - 10
Purchased rights and other 4 - 10
Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted
if necessary.
3.10 Inventories
Inventories are measured at the lower of cost and net realizable value. The cost of inventories of raw
materials, spare parts and supplies are based on the weighted average principle or the first-in-first-
out method, and includes expenditure incurred in acquiring the inventories and bringing them to their
existing location and condition. In case of manufactured inventories and work in progress, cost includes
an appropriate share of production overheads based on normal operating capacity. Net realizable value
is the estimated selling price in the ordinary course of business, less the estimated costs of completion
and selling expenses.
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Annual Report 2020
132NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
3. Summary of significant accounting policies
(continued)
3.11 Impairment of assets
Non-derivative financial assets
The Group assesses at each balance sheet date whether there is objective evidence that a non-
derivative financial asset or a group of non-derivative financial assets is impaired. A non-derivative
financial asset is considered to be impaired if the counterparty does not meet the agreed payment terms
or when evidence exists that the counterpart will not be able to do so. The Group considers evidence of
impairment for these assets at both an individual asset and a collective level. All individually significant
assets are individually assessed for impairment. Those found not to be impaired are then collectively
assessed for any impairment that has been incurred but not yet individually identified. Assets that are
not individually significant are collectively assessed for impairment. Collective assessment is carried
out by grouping together assets with similar risk characteristics. In assessing collective impairment,
the Group uses historical information on the timing of recoveries and the amount of loss incurred, and
makes an adjustment if current economic and credit conditions are such that the actual losses are
likely to be greater or lesser than suggested by historical trends. An impairment loss is recognized for
the amount by which the carrying amount of a non-derivative financial asset exceeds its estimated
discounted future cash flows using the original interest rate. Impaired non-derivative financial assets
are tested periodically to determine whether the estimated future cash flows have increased and the
impairment has to be reversed. Reversal of impairments is only permitted if in a subsequent period
after an impairment loss has been recognized, the amount of the impairment loss decreases and the
decrease can be related objectively to an event after the impairment loss was recognized.
In the case of a financial asset classified as financial asset at fair value through other comprehensive
income, a significant or prolonged decline in the fair value of the financial asset at fair value through
other comprehensive income below its acquisition cost is considered as an indicator that the financial
asset at fair value through other comprehensive income is impaired. If any such evidence exists for a
financial asset at fair value through other comprehensive income, the cumulative loss – measured as
the difference between the acquisition cost and the current fair value, less any impairment loss on that
financial asset previously recognized in profit or loss – is removed from other comprehensive income
and recognized in profit or loss. Impairment losses recognized in profit or loss on equity instruments
classified as financial asset at fair value through other comprehensive income are not reversed through
profit or loss.
Derivative financial assets
Derivative financial assets are measured at fair value and the Group investigates whether the
counterparty’s creditworthiness gives rise to an impairment. When determining the fair value, credit
value and debit value adjustments are taken into account.
Non-financial assets
Non-financial assets that have an indefinite useful life, for example goodwill, are not subject to
amortization but are tested annually for impairment or more frequently when indicators arise. Assets
with a finite useful life are subject to depreciation or amortization and are reviewed at each reporting
date to determine whether there is an indication of impairment. If any such indication exists, then the
assets’ recoverable amount is estimated. An impairment loss is recognized for the amount by which the
assets’ carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an
asset’s fair value less costs of disposal and its value in use. The value in use is the present value of the
future cash flows expected to be derived from an asset or cash-generating unit by continued use. For
the purposes of assessing impairment, assets are grouped based on the lowest level for which there are
separately identifiable cash flows (cash-generating units). Impairment losses are recognized in profit or
loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and
then to reduce the carrying amounts of the other assets in the CGU on a pro-rata basis. Non-financial
assets, which are impaired, are tested periodically to determine whether the recoverable amount has
increased and the impairment be (partially) reversed. Impairment losses on goodwill are not reversed.
For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does
not exceed the carrying amount that would have been determined, net of depreciation or amortization,
if no impairment loss had been recognized. Reversal of impairments is only permitted if in a subsequent
period after an impairment loss has been recognized, the amount of the impairment loss decreases and
the decrease can be related objectively to an event after the impairment loss was recognized.
3.12 Provisions
Provisions are recognized when a present legal or constructive obligation based on past events exists,
and it is probable that an outflow of economic benefits is required to settle the obligation. If the outflow
is probable, but cannot be determined reliably, the obligation is disclosed. The non-current part of
provisions is determined by discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and the risks specific to the liability.
The unwinding of the discount is recognized as finance cost.
Asset retirement obligations
The Group recognizes a provision if the Group has an obligation to restore a leased asset in its
original condition at the end of its lease term and in case of legal requirements with respect to clean-
up of contamination of land, and the estimate can be made reliable. Based on the land lease of their
production facilities, some entities have the obligation to restore their site upon decommissioning.
The Group has not recorded a liability for this conditional asset retirement obligation, as it does not
believe there is currently a reasonable basis for estimating a date or range of dates of cessation of the
operations, which is necessary to estimate the fair value of this liability. Considering that maintenance,
turnarounds and any other upgrades will be conducted on a regular basis as was done in the past, this
can extend the physical life of the production facility indefinitely (also taken into account the possible
changes in technology and availability of raw materials).
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Other informationSustainability OCI N.V.
Annual Report 2020
133NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
3. Summary of significant accounting policies
(continued)
Claims and contingencies
The Group is subject to legal and regulatory proceedings in various jurisdictions. Such proceedings may
result in criminal or civil sanctions, penalties or disgorgements against the Company. If it is probable
that an obligation to the Group exists, which will result in an outflow of resources and the amount of the
outflow can be reliably estimated, a provision is recognized.
Donation provision
The donation provision is recognized as a constructive obligation, the amount is undiscounted as the
Group does not know the exact settlement date.
3.13 Revenue from contracts with customers
Revenues are recognized to depict the transfer of goods or services to customers in the ordinary course
of the Group’s activities, in the amounts that reflect the considerations to which the Group expects to
be entitled in exchange for those goods or services. Revenue is recognized when the Group satisfies
the performance obligations by transferring promised goods or services to customers. The main
performance obligation of the Group is the transfer of the Group’s fertilizer and chemical products to
customers. Revenue from the sale of fertilizer and chemical products are the two main revenue streams
of the Group.
Goods are transferred when the customer obtains control of the asset. The timing of when control
transfers depends on the sales and shipping terms agreed. Depending on its nature and the agreed
sales terms, a performance obligation is either satisfied at certain point in time or over a certain period of
time.
Revenue is recognized net of expected discounts and rebates to customers. Accumulated experience
and management judgement is used to estimate and provide for the discounts and rebates and revenue
is only recognized to the extent that it is highly probably that a significant reversal will not occur. The
Group does not have any contracts where the period of time between the transfer of the promised
goods or services to the customer and payment by the customer exceeds one year. Consequently, no
adjustment is made to transaction prices for the time value of money.
3.14 Government grants
An unconditional government grant related to an asset is recognized in profit or loss as ‘Other income’
when the grant becomes receivable. When the grant relates to an asset, it is recognized as income in
equal amounts over the expected useful life of the related asset. Grants that compensate the Group for
expenses incurred are recognized in profit or loss as ‘Other income’ on a systematic basis in the periods
in which the expenses are recognized. Other government grants are recognized initially as deferred
income at fair value when there is reasonable assurance that they will be received and the Group will
comply with the conditions associated with the grant, and are then recognized in profit or loss as ‘Other
income’ on a systematic basis over the useful life of the asset.
European Emission Allowances
The Group receives European Emission Allowances (“EUAs”) as a result of its industrial activities in
the Netherlands. The grant of these allowances is within the scope of IAS 20 Government Grants.
Upon initial recognition, the EUA’s are recognized at cost. Concurrently, a liability is recognized for the
obligation to refund the allowances for CO2 emissions during the compliance period. In the event that a
deficit in EUAs is identified, the Group has to purchase additional EUAs on the commodity markets. Any
deficit in EUAs is therefore measured at fair value through profit or loss.
3.15 Lease accounting
Whether an arrangement is, or contains a lease is assessed at the commencement date of the lease. In
general, an arrangement is considered to be or to contain a lease when all of the following apply:
• there is an identified asset;
• OCI obtains substantially all economic benefits from the use of the asset; and
• OCI can direct the use of the identified asset.
Lease obligations are recognized based on the present value of the future minimum lease payments.
Right-of-use assets are valued equal to the lease liabilities. As leases do not easily provide for an implicit
rate, OCI uses the incremental borrowing rate. The lease terms may include options to extend or
terminate the lease when it is reasonably certain that we will exercise that option.
For leases, each lease payment is allocated between the liability and finance cost. The finance cost is
charged to the consolidated statement of profit or loss over the term of the lease so as to produce a
constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-
use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line
basis.
OCI has lease agreements with lease and non-lease components, which are generally accounted
for as a single lease component. For assets in the class leases of offices and buildings, we account
for the lease and non-lease components separately. For these types of leases the allocation of the
consideration between lease and non-lease components is based on the relative stand-alone prices of
lease components included in the lease arrangements. Leases are presented as ‘Right-of-use assets’
and ‘Lease obligations’.
Short term leases (less than 12 months) or low value leases (less than USD 5,000) are expensed
through the statement of profit or loss as incurred.
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Other informationSustainability OCI N.V.
Annual Report 2020
134NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
3. Summary of significant accounting policies
(continued)
3.16 Finance income and cost
Finance income comprises:
• interest income on funds invested (including on financial assets at fair value through other
comprehensive income);
• gains on the disposal of financial assets at fair value through other comprehensive income;
• dividend income;
• fair value gains on financial assets at fair value through profit or loss;
• gains on hedging instruments related to foreign currency and interest rate derivatives that are
recognized in profit or loss and reclassifications of amounts previously recognized in other
comprehensive income; and
• interest income is recognized as it accrues in profit or loss, using the effective interest method.
Dividend income is recognized in profit or loss on the date that the Group’s right to receive payment is
established, which in the case of quoted securities is normally the ex-dividend date.
Finance cost comprise:
• interest expense on borrowings;
• unwinding of the discount on provisions and contingent consideration;
• interest expense related to lease obligations;
• losses on disposal of financial assets at fair value through other comprehensive income;
• fair value losses on financial assets at fair value through profit or loss;
• loss on hedging instruments related to foreign currency and interest rate derivatives that are
recognized in profit or loss and reclassifications of amounts previously recognized in other
comprehensive income; and
• impairment losses recognized on financial assets (other than trade receivables).
Borrowing costs that are not directly attributable to the acquisition, construction or production of a
qualifying asset are recognized in profit or loss and expensed as incurred. Foreign currency gains and
losses are recognized on a net basis as either finance income or finance cost depending on whether
foreign currency movements are in a net gain or net loss position.
3.17 Employee benefits
Defined contribution plan
Certain Group subsidiaries provide pension plans, end of service remuneration plans and long-term
service benefits. These pension plans qualify as defined contribution plans. Obligations for contributions
to defined contribution plans are expensed as the related service is provided. Prepaid contributions are
recognized as an asset to the extent that a cash refund or a reduction in future payments is available.
Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognized
for the amount expected to be paid if the Group has a present legal or constructive obligation to pay
this amount as a result of past service provided by the employee and the obligation can be estimated
reliably.
Long-term employee benefits
The Group long-term employee benefits are recognized if the Group has a present legal or constructive
obligation to pay this amount as a result of past service provided by the employee and the obligation
can be estimated reliably to determine its present value. The discount rate is the yield at the balance
sheet date on triple-A (‘AAA’) credit rated bonds that have maturity dates approximating to the terms of
the Group’s obligations. Re-measurements are recognized in profit or loss in the period in which they
arise.
Termination benefits
Employee termination benefits are payable when employment is terminated before the normal retirement
date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. OCI
recognizes termination benefits when OCI is demonstrably committed to either terminating the
employment of current employees according to a detailed formal plan without possibility of withdrawal,
or when OCI is providing termination benefits as a result of an offer made to encourage voluntary
redundancy. Benefits falling due more than 12 months after balance sheet date are discounted to
present value.
Share-based payments
Employees (including senior executives) of the Group receive remuneration in the form of share-based
payments, whereby employees render services as consideration for equity instruments.
The grant date fair value of equity-settled share-based payment awards granted to employees is
recognized as an employee expense, with a corresponding increase in equity, over the period (the
vesting period) that the employees render service and becomes unconditionally entitled to the awards.
The amount recognized as an expense is adjusted to reflect the number of awards for which the
related service and non-market performance conditions are expected to be met, such that the amount
ultimately recognized as an expense is based on the number of awards that meet the related service
and non-market performance conditions at the vesting date.
For cash-settled share-based compensation plans and share-based compensation plans with cash
alternatives the liability is remeasured at each balance sheet date during the vesting period and for share
option plans also during the exercise period.
3.18 Income tax
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using
tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable
or receivable in respect of previous years. The amount of current tax payable or receivable is the best
estimate of the tax amount expected to be paid or received that reflects uncertainty related to income
taxes, if any. Current tax also includes any tax arising from the declaration of dividends.
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
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Other informationSustainability OCI N.V.
Annual Report 2020
135NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
3. Summary of significant accounting policies
(continued)
Current income tax receivable and payable are offset when there is a legally enforceable right to offset
and when the current income tax relates to the same fiscal authority.
Deferred tax liabilities are recognized for all taxable temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the consolidated financial statements (‘balance
sheet’ method). Deferred tax assets are recognized for all deductible temporary differences, unused
carry forward losses and unused carry forward tax credits, to the extent that it is probable that future
taxable profit will be available against which the deferred income tax assets can be utilized. Deferred tax
assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable
that the related tax benefit will be realised; such reductions are reversed when the probability of future
taxable profits improves.
Deferred income tax is not recognized if it arises from initial recognition of an asset or liability in a
transaction that is not a business combination and at the time of the transaction affects neither
accounting nor taxable profit or loss. Also, no deferred income tax is recognized regarding the initial
recognition of goodwill and regarding investments in subsidiaries, associates and joint arrangements to
the extent that the Group is able to control the timing of the reversal of the temporary differences and it
is probable that they will not reverse in the foreseeable future.
Deferred income tax is measured at the tax rates that are expected to apply to the period when the
asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date, and reflects uncertainty related to income taxes, if any.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset
current tax assets against current tax liabilities and when the deferred income tax relates to the same
fiscal authority.
In cases where it is concluded it is not probable that tax authorities will accept a tax treatment, the
effect of the uncertainty is reflected in the recognition and measurement of tax assets and liabilities
or, alternatively, a provision is made for the amount that is expected to be settled, where this can be
reasonably estimated. This assessment relies on estimates and assumptions and may involve a series
of judgments about future events. New information may become available that causes the company to
change its judgment regarding the adequacy of existing tax assets and liabilities. Such changes to tax
assets and liabilities will impact the income tax expense in the period during which such a determination
is made.
3.19 Segment reporting
An operating segment is a component of an entity that engages in business activities for which it may
earn revenues and incur expenses (including revenues and expenses relating to transactions with other
components of the same entity), whose operating results are regularly reviewed by the entity’s Chief
Operating Decision Maker (‘CODM’) to make decisions about resource allocation to the segment and to
assess its performance and for which discrete financial information is available. The Group determines
and presents operating segments on the basis of information that internally is provided to the CODM
during the period. Operating segments are grouped into reporting segments based on similar economic
environments and similar products.
3.20 Consolidated statement of cash flows
The consolidated statement of cash flows has been prepared using the ‘indirect’ method. Cash flows
in foreign currencies have been translated applying average exchange rates. Currency translation
differences on cash are shown separately in the consolidated statement of cash flows. Cash flows from
investing activities consist mostly of investments and divestments in property, plant and equipment,
intangible assets, and acquisitions insofar as these are paid for in cash. Acquisitions or disposals of
subsidiaries are presented as acquisition of subsidiary, net of cash. Cash flows relating to capitalized
borrowing cost are presented as cash flows from operating activities. Cash flows from discontinued
operations / assets held for demerger are presented separately from the cash flows from continuing
operations.
3.21 Earnings per share
Earnings per ordinary share are calculated by dividing the profit or loss (net) attributable to holders of
ordinary shares by the weighted average number of ordinary shares outstanding during the year. In
making this calculation the (ordinary) treasury shares are deducted from the number of ordinary shares
outstanding. The calculation of the diluted earnings per share is based on the weighted average number
of ordinary shares outstanding plus the potential increase as a result of the conversion of convertible
bonds and the settlement of share-based compensation plans (share option plans). Anti-dilutive effects
are not included in the calculation. An adjustment is made to profit or loss (net) to eliminate interest
charges, whilst allowing for effect of taxation. Regarding equity-settled share option plans it is assumed
that all outstanding plans will vest. The potential increase arising from share option plans is based on
a calculation of the value of the options outstanding. This is the number of options multiplied by the
exercise price, divided by the average share price during the financial year. This potential increase is only
applied if the option has intrinsic value.
4. New accounting standards and policies
On a regular basis, the IASB issues new accounting standards, amendments and revisions to existing
standards and interpretations. These new accounting standards, amendments and revisions to existing
standards and interpretations are subject to endorsement by the European Union.
4.1 Standards, amendments, revisions and interpretations that became effective to OCI
during 2020
Currently there are no standards and interpretations that became effective to OCI during 2020.
4.2 Standards, amendments, revisions and interpretations not yet effective to OCI
IFRS standards and interpretations thereof not yet in force which may apply to the future Group’s
consolidated financial statements are being assessed for their potential impact. Currently there are no
standards and interpretations not yet effective that would have a significant impact on the Group.
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
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Other informationSustainability OCI N.V.
Annual Report 2020
136NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
5. Critical accounting judgment, estimates and assumptions
The preparation of the financial statements in compliance with IFRS requires management to make
judgments, estimates and assumptions that affect amounts reported in the consolidated financial
statements. The estimates and assumptions are based on experience and various other factors that
are believed to be reasonable under the circumstances and are used to judge the carrying amounts
of assets and liabilities that are not readily apparent from other sources. The estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in
the period in which the estimate is revised or in the revision period and future periods, if the changed
estimates affect both current and future periods. As a result of the outbreak of COVID-19 in 2020, all
our critical accounting judgments, estimates and assumptions have been reviewed and updated when
necessary following this situation.
The most critical accounting policies, involving a higher degree of judgment and complexity in applying
principles of valuation and for which changes in the assumptions and estimates could result in
significantly different results than those recorded in the financial statements, are the following:
Goodwill and other intangible assets
Intangible assets with finite useful lives are carried at cost less cumulative amortization and any
impairment. Amortization is calculated using the ‘straight-line’ method based on the estimated useful
lives. Management makes estimates regarding the useful lives and residual values and assumes that
amortization takes place on a ‘straight-line’ basis. The assets’ useful lives are reviewed, and adjusted
if appropriate, at each balance sheet date. For intangible assets with finite useful lives, OCI assesses
annually or more frequently whether indicators exist that suggest the intangible asset might be impaired
by comparing the recoverable amounts with their carrying amounts. In determining the recoverable
amounts of intangible assets, OCI makes estimates and assumptions about future cash flows based on
the value in use.
In doing so, OCI also makes assumptions and estimates regarding the discount rates in order to
calculate the net present value of the future cash flows. OCI tests at least annually whether goodwill is
impaired by comparing the recoverable amounts of cash-generating units with their carrying amounts.
The recoverable amount is the higher of the fair value less cost of disposal and the value in use.
In determining the recoverable amount, OCI makes estimates and assumptions concerning future
revenues, future costs, future working capital, future investments, Weighted Average Cost of Capital
(‘WACC’) and future inflation rates.
Property, plant and equipment
Depreciation is calculated using the ‘straight-line’ method based on the estimated useful lives, taking
into account any residual values. Management makes estimates regarding the useful lives and residual
values and assumes that depreciation takes place on a ‘straight-line’ basis. The assets’ residual values
and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. OCI assesses
annually, or more frequently, whether indicators exist that suggest that an item of property, plant and
equipment might be impaired by comparing the recoverable amounts with their carrying amounts.
In determining the recoverable amounts of property, plant and equipment, OCI makes estimates and
assumptions about future cash flows based on the value in use. The discount rate to be used in order
to calculate the net present value of the future cash flows in the impairment analysis is based on the
WACC.
Financial instruments
The fair value of financial instruments traded in active markets (financial instruments in the fair value
hierarchy level 1) is based on quoted market prices at the balance sheet date. The fair value of financial
instruments not traded in an active market with observable market prices (financial instruments in the
fair value hierarchy level 2) is determined using generally accepted valuation techniques. These valuation
techniques include estimates and assumptions about forward rates, discount rates based on a single
interest rate, or on a yield-curve based on market conditions existing at the balance sheet date. The fair
value of borrowings and interest rate swaps is calculated based on the present value of the estimated
future cash flows based on the yield-curve applicable at the balance sheet date. If the financial
instrument contains a floating interest rate, the future expected interest rates are determined based on
forward rates. The fair value of forward foreign exchange contracts is determined using quoted forward
exchange rates at the balance sheet date. Gas price option and gas swap contracts are valued using
applicable market yield curves.
All inputs for the fair value calculations represent observable market data that are obtained from external
sources that are deemed to be independent and reliable. The net carrying amount of trade receivables
and trade payables is assumed to approximate the fair value due to the short-term nature. The fair value
of financial instruments with no observable market prices (financial instruments in the fair value hierarchy
level 3) is based on assumptions that market participants would use when pricing these assets or
liability, including assumptions about risk. Assumptions about risk include the risk inherent in a particular
valuation technique used to measure fair value (such as a pricing model) and the risk inherent in the
inputs to the valuation technique, including a risk adjustment when there is significant measurement
uncertainty.
The fair value of non-current financial liabilities is estimated by discounting the future cash flows using
original effective yield-curves. Unlisted equity securities in the financial assets at fair value through other
comprehensive income category (financial instruments in the fair value hierarchy level 3) are measured
at cost less impairments. A significant and prolonged decline in the fair value of a financial asset at fair
value through other comprehensive income below its acquisition cost is considered as an indicator that
the financial asset at fair value through other comprehensive income is impaired. If any such evidence
exists for a financial asset at fair value through other comprehensive income, the cumulative losses
previously recognized in other comprehensive income is recognized in the profit or loss – measured as
the difference between the acquisition cost and the current fair value, less any impairment loss on that
financial asset previously recognized in profit or loss – is removed from other comprehensive income
and recognized in profit or loss.
Consolidated Financial Statements
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Other informationSustainability OCI N.V.
Annual Report 2020
1375. Critical accounting judgment, estimates and assumptions
(continued)
Impairment financial instruments (including trade receivables)
Objective evidence may exist in circumstances in which a counterparty has been placed in bankruptcy,
or has failed on the repayments of principal and interest. In other circumstances OCI uses judgment
to determine whether financial assets may be impaired. OCI uses judgment to determine whether an
impairment can be reversed, an assumption in doing so might be an improvement in the debtor’s credit
rating or receipt of payments due. For listed equity securities in the financial assets at fair value through
other comprehensive income category, the Group uses the assumption that if the market value declined
by more than 25 percent and more than 6 months, the asset is assumed to be impaired.
For unlisted equity securities in the financial assets at fair value through other comprehensive income
category, an impairment test is performed if objective evidence becomes available to the Group that the
asset might be impaired. For debt-securities, an impairment trigger exists when the counterpart fails
to meet its contractual payment obligations or there is evidence that the counterpart has encountered
financial difficulties. The impairment is determined based on the carrying amount and the recoverable
amount.
The recoverable amount is determined as the present value of estimated future cash flows using the
original effective interest rate.
Inventories
In determining the net realizable value of inventories, OCI estimates the selling prices in the ordinary
course of business, cost of completion and cost to sell. In doing so, OCI makes estimates and
assumptions based on current market prices, historical usage of various product categories versus
current inventory levels and specific identified obsolescence risks (e.g. end of life of specific goods and
spare parts and the impact of new environmental legislation).
Provisions
Recognition of provisions include significant estimates, assumptions and judgments. IFRS requires
only those provisions to be recognized if there is an expected outflow of resources and if the cost of
these outflows can be estimated reliably. Accordingly, management exercises considerable judgment in
determining whether it is more likely than not that there is a present obligation as a result of a past event
at the end of the reporting period, whether it is probable that such a proceeding will result in an outflow
of resources and whether the amount of the obligation can be reliably estimated. These judgments
are subject to change as new information becomes available. The required amount of a provision may
change in the future due to new developments in the matter. Revisions to estimates may significantly
impact future profit or loss. Upon resolution, the Group may incur charges in excess of the recorded
provisions for such matters.
Provisions for asset retirement obligations, represent estimated costs of decommissioning. Due to the
long time period over which future cash outflows are expected to occur, including the respective interest
accretion, assumptions are required to be made. Amongst others, the estimated cash outflows could
alter significantly if, and when, political developments affect future laws and regulation with respect to
asset retirements. The Group has not recognized any asset retirement obligations because a reliable
estimate of the amount of the obligations cannot be made.
With respect to legal cases, the Group has to estimate the outcome. Regulatory and legal proceedings
as well as government investigations often involve complex legal issues and are subject to substantial
uncertainties. The Company periodically reviews the status of these proceedings with both the internal
and external legal counsels.
Income taxes
OCI is subject to income taxes in several jurisdictions. Estimates are required in determining the group-
wide provision for income taxes. There are some transactions and calculations for which the ultimate
tax position is uncertain during the ordinary course of business. The Group recognizes provisions for
anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final
tax outcome of these matters is different from amounts that were initially recorded, such differences will
impact the current income tax and deferred tax provisions in the period in which such determination
is made. OCI recognizes deferred tax assets to the extent that it is probable that future taxable profits
will be available for the deferred tax asset to be recovered. This is based on estimates of taxable future
income by jurisdiction in which OCI operates and the period over which deferred tax assets are expected
to be recoverable. In the event that actual results or new estimates differ from previous estimates and
depending on the possible tax strategies that may be implemented, changes to the recognition of
deferred tax assets could be required, which could impact the financial position and profit or loss.
Leases
The assessment of whether a contract is or contains a lease requires judgment with respect to whether
the lessor has substantive substitution rights, who obtains economic benefits from use of the asset and
who takes the ‘how and for what purpose’ decisions during the period of use. Judgment is also applied
in order to assess whether the entity will exercise any extension or cancelation options of a lease. The
group applies judgments in order to determine the incremental borrowing rate in order to calculate the
lease liabilities.
Control over investees
In determining whether OCI shall consolidate certain investments in joint arrangements, OCI makes
assumptions about whether certain decision rights are substantive or protective in nature. In doing
so, OCI applies judgment regarding shareholder agreements it has with those other investees. If OCI
determines it holds the majority of the substantive decision rights, it assumes that it holds power over
the investee. OCI also makes assumptions whether it is exposed to variable returns and whether these
are linked to the power OCI holds. The linkage is tested by making assumptions whether OCI might be
acting as a principal rather than an agent. If OCI meets all three criteria, OCI assumes it controls the
investee.
Liquidity risk
As part of the preparation of the financial statements, the Company has assessed its liquidity risk and
going concern. Liquidity risk is the risk that the Group may encounter difficulty in meeting the obligations
associated with its financial liabilities that are settled by delivering cash or another financial asset. The
Company has made a number of assumptions in assessing its ability to meet its covenant requirements
and satisfy obligations as they become due. Determining these assumptions requires significant
judgment about future results and cash flows. Key assumptions include product pricing, gas pricing,
utilization rates and the ability to arrange financing and obtain waivers for potential covenant breaches.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
1386. Financial risk and capital management
Overview
The Group has exposure to credit, liquidity and market risks from financial instruments. These risks
arise from exposures that occur in the normal course of business and are managed on a consolidated
company basis. This note presents information about the Group’s exposure to each of the above risks,
the Group’s objectives, policies and processes for measuring and managing these risks, additionally it
also includes the Group’s management of capital.
Risk management framework
The Board has oversight responsibility on the establishment and monitoring of the Group’s risk
management framework. Senior (local) management is responsible for the effective operation of the
internal risk management and control systems. The Audit and Risk department is responsible for the
facilitation and supervision of the Risk Management function, compliance with OCI Internal Control
Framework and supports the Board in the exercise of their aforementioned risk management duties.
The Group’s risk management policies and practices are established to identify and analyze the risks faced
by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect changes in market conditions and the
Group’s business activities. The Group, through its training and management standards and procedures,
aims to develop a disciplined and constructive control environment in which all employees understand
their roles and responsibilities.
The Audit Committee oversees how management monitors compliance with the Group’s risk
management policies and procedures, and reviews the adequacy of the risk management framework
in relation to the risks faced by the Group. The Audit Committee is assisted in its oversight role by
the Audit and Risk Department. The Audit and Risk Department undertakes both regular and ad hoc
reviews of risk management controls and procedures, the results of which are reported to the Audit
Committee.
6.1 Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Group’s receivables from
customers and investments in debt securities. The Company mitigates the exposure to credit risk on
outstanding cash balances by placing funds at multiple financial institutions with a sufficient credit rating.
The Group’s exposure to customer credit risk is monitored and mitigated by performing credit checks
before selling any goods. No collateral is received. The Group establishes an allowance, if needed, for
impairment that represents its estimate of expected losses in respect of trade and other receivables.
The main components of this allowance are a specific loss component that relates to individually
significant exposures, and a collective loss component established for groups of similar assets in
respect of losses that are expected based on historical performance. IFRS 9 establishes a three-stage
impairment model, based on whether there has been a significant increase in the credit risk of a financial
asset since its initial recognition. As at 31 December 2020, management assessed any significant
increase in credit risk based on internal and external factors related to the financial instruments and
concluded no such significant credit risk was present. Hence, no allowance related to credit risk has
been recognized.
As of September 2018, the Group entered into a securitization agreement to sell certain trade
receivables to an external financial institution. The agreement permits securitization of trade receivables
up to EUR 180.0 million (USD 218.4
million). As per 31 December 2020 an amount of EUR 122.6 million
(USD 148.7 million) of trade receivables were transferred.
With respect to transactions with financial institutions, the Group sets a minimum credit rating for the
counterparties. The maximum exposure to credit risk is the carrying amount of financial instruments,
for an overview reference is made to the tables financial instruments by category. There is no significant
concentration by counterparty of credit risk in trade and other receivables, financial assets at fair value
through other comprehensive income or cash and cash equivalents. Concentrations of receivables by
region can be seen in the table below.
The maximum exposure to credit risk at the reporting date is as follows:
$ millions Note
2020 2019
Trade and other receivables (9)
604.4
512.5Financial assets at fair value through other comprehensive income
(11)
30.0
33.4Cash and cash equivalents (14)
686.3
600.5Total
1,320.7
1,146.4The maximum exposure to credit risk for trade and other receivables by geographic region is as follows:
$ millions
2020 2019
Middle East and Africa
192.0
122.7Asia and Oceania
18.5
53.7Europe
269.0
214.7Americas
124.9
121.4Total
604.4
512.5The maximum exposure to credit risk for cash and cash equivalents by geographic region is as follows:
$ millions
2020 2019
Middle East and Africa
535.0
425.0Europe
17.6
96.6Americas
133.7
78.9Total
686.3
600.5NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
1396. Financial risk and capital management
(continued)
6.2 Liquidity risk
6.2.1 General
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or another financial asset.
The following are the contractual maturities of financial liabilities, including estimated interest payments
and exclude the impact of netting agreements:
At 31 December 2020
$ millions Note
Carrying
amount
Contractual
cash flow
Less than
1 year
Between
1 and
5 years
More than
5 years
Financial liabilities
Cash outflows:
Loans and borrowings (18)
4,416.6 5,557.0 479.9 4,258.6 818.5
Lease obligations (19)
292.2 539.1 48.5 125.6 365.0
Trade and other payables (20)
1,020.6 1,020.6 999.1 17.5 4.0
Letters of guarantee (28)
- - - - -
Derivatives (20)
8.7 8.7 4.5 4.2 -
Total
5,738.1 7,125.4 1,532.0 4,405.9 1,187.5
At 31 December 2019
$ millions Note
Carrying
amount
Contractual
cash flow
Less than
1 year
Between
1 and
5 years
More than
5 years
Financial liabilities
Cash outflows:
Loans and borrowings (18) 4,662.3 6,081.4 469.1 4,303.0 1,309.3
Lease obligations (19) 285.3 545.4 41.5 116.7 387.2
Trade and other payables (20) 1,004.4 1,004.4 984.3 19.7 0.4
Letters of guarantee (28) - - - - -
Derivatives (20) 17.6 17.6 7.0 10.6 -
Total 5,969.6 7,648.8 1,501.9 4,450.0 1,696.9
The interest on floating rate loans and borrowings is based on forward interest rates at period-end.
This interest rate may change as the market interest rate changes. Callable loan amounts are classified
as ‘Less than one year’. The future obligations will be managed by the future incoming cash from
operations, currently available non-restricted cash and cash equivalents of USD 632.2 million and
unused amounts on credit facility agreements in the amount of USD 705.1 million, reference is made to
note 18.
The Group’s approach to managing liquidity risk is to ensure that it will always have sufficient liquidity to
meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Group’s reputation. This is also safeguarded by using multiple financial
institutions in order to mitigate any concentration of liquidity risk.
The Group’s financing strategy is to secure external financing primarily at OCI N.V. with debt at an
operating company level only if there is a compelling economic rationale. OCI N.V. acts as the financing
company thus limiting the number of cross relationships within the Company and maximizing flexibility to
divest operating companies.
The liquidity risk is monitored internally at Group level. On an ongoing basis the Group prepares
liquidity forecasts to verify whether the Group is able to meet its future debt obligations. The Company
has also carefully evaluated the funding of its Business Plan for at least the next 12 months from the
date of issuance of the financial statements, taking into account the measures mentioned below and
has applied sensitivities to the forecast level of liquidity headroom available. Key assumptions include
product pricing, natural gas pricing and utilization rates. Management has applied these assumptions to
the forecasts, which would leave sufficient liquidity headroom.
6.2.2 Refinancing activity
The following refinancing activity was completed during 2020 to optimize the Group’s finance cost,
extend its debt maturity profile, and enhance its cashflow up-streaming to OCI N.V.
• In October 2020 OCI N.V. completed a dual-tranche bond offering consisting of USD 400.0 million
senior secured fixed rate notes due 2025 and EUR 400.0 million senior secured fixed rate notes due
2025. The Dollar Notes bear interest at a rate of 4.625% per annum and the Euro Notes bear interest
at a rate of 3.625% per annum. The Notes were issued at par, are senior secured obligations of the
Company and are guaranteed by certain of the Company’s subsidiaries. Interest will be payable semi-
annually.
• In October 2020, Fertiglobe completed a USD 385.0 million refinancing (USD 310.0 million term
loan and USD 75.0 million RCF) maturing in 2025 at an interest rate of LIBOR + 2.00%. This facility
replaced the existing credit facilities at EFC that would mature in 2025 and 2026 with an interest rate
of LIBOR + 3.75% on USD borrowings and Central Bank of Egypt (‘CBE’) mid corridor + 0.25% on
EGP borrowings.
6.3 Market risk
Market risk is the risk of changes in market prices, such as foreign exchange rates, interest rates,
commodity prices and equity prices that will affect the Group’s income or the value of its holdings of
financial instruments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters, while optimizing the return.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
1406. Financial risk and capital management
(continued)
The Group is exposed to foreign currency risk arising in separate ways:
Foreign exchange translation risk
Due to the Group’s international presence, the Group is exposed to the translation of foreign currency
denominated transactions and monetary assets that are different from the US dollar (which is the
Group’s presentation currency). The currencies concerned are mainly the Euro and the Algerian dinar.
These exposures are managed by the group treasury function, which hedges a portion of the foreign
currency exposures estimated to arise in the foreseeable future, for the unhedged portion the Group
seeks to mitigate translation risk by broadly matching the remaining currency of debt with cashflows.
The nominal amount of the foreign currency derivatives outstanding used to hedge translation risk as
per 31 December 2020 was USD 1,005.7 million (2019: USD 220.2 million) and relates to the exposure
of Euro denominated assets and liabilities.
Foreign exchange transaction risk
The Group entities predominantly execute their activities in their respective functional currencies. The
Group is however exposed to foreign exchange transaction risk to the extent that there is a mismatch
between the currencies in which sales, purchases, investments and borrowings are denominated and
the respective functional currencies of the Group entities. The Group monitors the exposure to foreign
currency risk arising from operating activities and enters selectively into foreign exchange contracts to
hedge foreign currency exposures. The nominal amount of the foreign currency derivatives outstanding
used to hedge transaction risk as per 31 December 2020 was USD 65.9 million (2019: USD 84.7
million) and relates to the USD exposure of the Group (on Euro currencies). The functional currencies
of the Group entities are primarily the US dollar, the Algerian dinar and the Euro. EFC and EBIC have
exposure to fluctuations in the USD / EGP exchange rates.
The summary of balances of the Group’s exposure to foreign exchange transaction, where the main
exposure currencies are different from the functional currencies, including intercompany balances, is as
follows:
At 31 December 2020
$ millions USD EUR EGP
Trade and other receivables
18.3 4.8 87.6
Trade and other receivables intercompany
2,098.3 0.8 0.8
Trade and other payables
(17.7) (4.1) (7.6)
Trade and other payables intercompany
(11.7) (6.4) -
Loans and borrowings
(1,350.0) - -
Loans and borrowings intercompany
(1,133.2) 5.4 -
Provisions
- - (120.7)
Cash and cash equivalents
238.9 8.8 26.5
At 31 December 2019
$ millions USD EUR EGP
Trade and other receivables 19.2 6.4 77.8
Trade and other receivables intercompany 2,046.4 3.5 0.1
Trade and other payables (61.9) (0.9) (16.3)
Trade and other payables intercompany (65.3) (1.4) (0.2)
Loans and borrowings (1,435.0) - (51.4)
Loans and borrowings intercompany (1,190.6) - -
Provisions - - (118.7)
Cash and cash equivalents 237.2 19.2 23.4
The Algerian dinar is not included in the above table of foreign exchange transaction exposure, since
there are no entities in the Group which have monetary items denominated in Algerian dinar, except for
Sorfert, which has the Algerian dinar as its functional currency.
Significant rates
The following significant exchange rates applied during the year against the US dollar:
Average
2020
Average
2019
Closing
2020
Closing
2019
Euro
1.1418
1.11931.2225
1.1213Egyptian pound
0.0632
0.05960.0635
0.0623Algerian dinar
0.0079
0.00840.0076
0.0084The following tables demonstrate the sensitivity to a reasonably possible change in USD exchange rate
to increase or (decrease) against the EUR, EGP and DZD, with all other variables held constant. The
Group’s exposure to foreign currency changes for all other currencies is not material.
31 December 2020
$ millions
Change in
FX rate
Effect on profit
before tax
Effect on
equity
EUR - USD
8 percent (32.0) -
(8) percent 32.0 -
EGP - USD
3 percent (0.4) -
(3) percent 0.4 -
DZD - USD
3 percent 7.2 -
(3) percent (7.2) -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
1416. Financial risk and capital management
(continued)
31 December 2019
$ millions
Change in
FX rate
Effect on profit
before tax
Effect on
equity
EUR - USD 5 percent (33.1) -
(5) percent 33.1 -
EGP - USD 3 percent (2.6) -
(3) percent 2.6 -
DZD - USD 3 percent 6.7 -
(3) percent (6.7) -
The figures in the above overview are determined based on the currency volatility of the respective
years. A significant part of the Group’s exposure to foreign currency transaction risk relates to
intercompany balances.
Interest rate risk
The Group’s cash flow interest rate risks arise from the exposure to variability in future cash flows of
floating rate financial instruments and refinancing fixed rate borrowings. The Group regularly reviews
its exposure to the global interest rate environment. The Group has not entered into any interest rate
derivatives.
The Group analyses its interest rate exposure on a dynamic basis. The Group calculates the impact on
profit or loss of a defined interest rate shift. The same interest rate shift is used for all currencies. The
following table demonstrates the sensitivity to a reasonably possible change in interest rates on that
portion of borrowings affected. With all other variables held constant, the Group’s profit before tax is
affected through the impact on floating rate borrowings plus refinancing of fixed rate borrowings, as
follows:
$ millions In basis points
2020
2019Effect on profit before tax for the coming year +100 bps
(6.6)
(7.2)- 100 bps
6.6
7.2The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently
observable market data, showing a lower volatility compared to prior years. The interest rate sensitivity
calculation is based on the interest-bearing liabilities excluding the restricted funds of IFCo, reference is
made to note 14.
Commodity price risk
Natural gas is one of the primary raw materials used in the Group’s production processes. The Group
is exposed to natural gas price commodity risk for those entities that buy natural gas at spot prices.
Management monitors the development of gas prices and products’ selling prices on a daily basis using
external historical and forecast market data provided by several data vendors. Management analyzes
the potential profit margin per product based on these data in order to make operational and hedging
decisions.
The Group enters into gas hedges in order to hedge future gas price levels over a certain period of time
(reference is made to note 20). The Group uses derivatives (Basis swaps, Index swaps and options)
in order to do so and does not apply hedge accounting on these instruments, therefore all fair value
changes related to these financial instruments are recognized in profit or loss. Fixed price gas contracts
and month-ahead swaps are accounted for under the ‘own use’ exemption. The fiscal year 2020 gas
price risk is reduced by the Group to an extent of 21% (including both physical pricings and financial
hedges).
The outstanding gas derivatives in MMBtu as per 31 December 2020 for the years 2021-2023 are:
• Flat priced contracts 18.4 million;
• Options (delta equivalent) 19.9 million;
• Basis Swaps 11.0 million
For the entities that are impacted by changes in natural gas prices during FY 2021, a change in the
average natural gas prices by USD 1 per MMBtu would impact the total annual cost of sales by USD
136.9 million, excluding the positive impact of our different hedges.
European Emission Allowance
The Group receives European Emission Allowances (“EUAs”) as a result of its industrial activities in the
Netherlands. The EUAs are granted annually in advance by the Dutch Emission Authority. The amount of
EUAs granted is based on an estimate of CO2 emissions in the Netherlands and the effective European
emission legislation. In arrears, the Group has to refund allowances to the Dutch Emission Authority
based on actual CO2 emissions during the year. In the event that a deficit in EUAs is identified, the
Group has to purchase additional EUAs on the commodity markets to settle its liability to the Dutch
Emission Authority.
During the year, the Group has generated additional liquidity by selling its EUAs to the market. This
generated a total net proceeds of USD 82.8 million resulting for the sale and repurchase of EUAs. Upon
the sale of EUA’s a liability to the Dutch Emission Authority is recorded, which is subsequently measured
at fair value. The total liability recorded as per 31 December 2020 amounts to USD 99.0 million. To
manage the price exposure, the Group entered into financial hedges to purchase EUAs in order to meet
its commitment to the Dutch Emission Authority. As per 31 December 2020, the fair value of these
forward contracts amounts to USD 3.1 million. The group does not apply hedge accounting to these
contracts.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
1426. Financial risk and capital management
(continued)
Categories of financial instruments:
31 December 2020
$ millions Note
Loans and
receivables /
payables at
amortized cost
Assets /
liabilities
at fair value
Financial assets
through other
comprehensive
income at fair
value
Assets
Trade and other receivables (9)
585.1 19.3 -
Financial assets at fair value through other
comprehensive income (11)
- - 30.0
Cash and cash equivalents (14)
686.3 - -
Total
1,271.4 19.3 30.0
Liabilities
Loans and borrowings
(18)
4,416.6 - -
Trade and other payables
(20)
921.6 107.7 -
Total
5,338.2 107.7 -
31 December 2019
$ millions Note
Loans and
receivables /
payables at
amortized cost
Derivatives
at fair value
Financial assets
through other
comprehensive
income at fair
value
Assets
Trade and other receivables (9) 507.5 5.0 -
Financial assets at fair value through other
comprehensive income (11) - - 33.4
Cash and cash equivalents (14) 600.5 - -
Total 1,108.0 5.0 33.4
Liabilities
Loans and borrowings - -
(18)
4,662.3Trade and other payables 17.6 -
(20)
1,004.4 Total 5,666.7 17.6 -
The Group has limited financial instruments carried at fair value. For derivative financial instruments,
the fair value is calculated within hierarchy category level 2. Financial assets at fair value through other
comprehensive income recognized as level 1 is USD 2.9 million (2019: USD 3.4 million), the investment
in the Infrastructure and Growth Capital Fund of USD 6.3 million
(2019: USD 6.8 million) was recognized
as level 2 as the valuation is partially derived from listed shares. The investment in Notore Chemical of
USD 20.8
million (2019: USD 23.2 million) is recognized as level 3, reference is made to note 11.
Notore is listed on the Nigerian Stock Exchange since 2018, however due to the lack in trading volumes
the investment is still valued within the hierarchy category level 3 based on audited financial statements.
In 2020 and 2019, there were no transfers between the fair value hierarchy categories. The fair value of
loans and borrowings and receivables are disclosed in notes 18 and 9, respectively.
6.4 Capital management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. Capital consists of ordinary shares,
retained earnings and non-controlling interests of the Group. The Board of Directors monitors the return
on capital as well as the level of dividends to ordinary shareholders. The Group is required by external
financial institutions to maintain certain capital requirements compared to its debt. Reference is made to
note 18 for a description of financial covenants.
The Group’s net debt to equity ratio at the reporting date was as follows:
$ millions Note
2020 2019
Loans and borrowings (18)
4,416.6
4,662.3Less:
cash and cash equivalents (14)
686.3
600.5Net debt
3,730.3
4,061.8Total equity
2,671.8
2,818.7Net debt to equity ratio at 31 December
1.40
1.44NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
1437. Property, plant and equipment and right-of-use assets
Property, plant and equipment:
$ millions
Land and
buildings
Plant and
equipment
Fixtures
and
fittings
Under
construction Total
Cost 594.1 6,533.6 32.3 223.4 7,383.4
Accumulated depreciation (83.8) (2,305.8) (18.1) - (2,407.7)
At 1 January 2019 510.3 4,227.8 14.2 223.4 4,975.7
Movements in the carrying amount:
Additions 0.1 31.2 3.6 253.3 288.2
Business combination Fertiglobe 103.8 1,714.5 2.0 23.1 1,843.4
Disposals - (1.3) (0.2) (2.1) (3.6)
Depreciation (26.0) (482.9) (2.8) - (511.7)
Transfers 2.4 334.7 1.3 (338.4) -
Effect of movement in exchange rates (0.9) (16.9) 0.2 (3.8) (21.4)
At 31 December 2019 589.7 5,807.1 18.3 155.5 6,570.6
Cost 749.9 9,209.3 58.8 155.5 10,173.5
Accumulated depreciation (160.2) (3,402.2) (40.5) - (3,602.9)
At 31 December 2019 589.7 5,807.1 18.3 155.5 6,570.6
Movements in the carrying amount:
Additions
5.1 24.0 2.5 221.2 252.8
Disposals
- - (0.3) - (0.3)
Depreciation
(27.5) (519.0) (3.5) - (550.0)
Transfers
4.3 228.4 0.8 (233.5) -
Effect of movement in exchange rates
(5.4) (26.1) (0.3) 3.0 (28.8)
At 31 December 2020
566.2 5,514.4 17.5 146.2 6,244.3
Cost
751.9 9,328.1 60.3 146.2 10,286.6
Accumulated depreciation
(185.7) (3,813.7) (42.8) - (4,042.3)
At 31 December 2020
566.2 5,514.4 17.5 146.2 6,244.3
As at 31 December 2020, the Group has land with a carrying amount of USD 35.3 million
(2019: USD
35.3 million).
The transfers of USD 233.5 million are assets under construction that were put into use during the
year. Transfers mainly relate to BioMCN for USD 42.5 million, OCI Nitrogen for 102.1 million and OCI
Beaumont for USD 74.2 million. The additions of USD 252.8 million mainly relate to OCI Nitrogen of
USD 92.0 million and OCI Beaumont of USD 44.7 million. The effect of movement in exchange rates
in 2020 mainly relates to Sorfert, BioMCN and OCI Nitrogen, which have different functional currencies
(Algerian dinar and Euro respectively) compared to the Group’s presentation currency. The Algerian
dinar decreased by 9.5% and the Euro increased by 9.0% against the US dollar in 2020. The capitalized
borrowing costs during the year ended 31 December 2020 amounts to USD 0.6 million (2019: USD
3.5 million) and relates fully to OCI Beaumont. The capitalization rate used is 4.0%. The capitalized
borrowing costs for both periods were substantially paid.
The difference between the additions in the above schedule and the investments in property, plant
and equipment mentioned in the consolidated statement of cash flows is mainly caused by changes in
capital expenditure creditors not yet paid and capitalized borrowing costs, which are presented as part
of interest expenses under cash flows from operating activities in the consolidated statement of cash
flows. For capital commitments reference is made to note 29.
Property, plant and equipment of USD 1,920.6 million
(2019: USD 2,041.2 million) have been pledged
as security for external loans and borrowings of IFCo. Reference is made to note 18.
Right-of-use assets:
$ millions
Note
Land and
buildings
Plant and
equipment
Fixture and
fittings Total
At 1 January 2020 133.6 88.3 55.6 277.5
Movement in the carrying amount:
Additions
11.8 14.8 3.8 30.4
Modifications
3.7 1.3 - 5.0
Disposals
(0.6) (1.1) - (1.7)
Depreciation (22)
(7.4) (24.4) (9.5) (41.3)
Effect of movement in exchange rates
6.7 2.9 (0.1) 9.5
At 31 December 2020
147.8 81.8 49.8 279.4
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
1448. Goodwill and other intangible assets
$ millions Goodwill
Licenses and
trademarks
Other
intangible
assets Total
Cost 1,807.2 75.4 4.8 1,887.4
Accumulated amortization and impairment (1,322.9) (73.8) (3.4) (1,400.1)
At 1 January 2019 484.3 1.6 1.4 487.3
Movements in the carrying amount:
Business combination Fertiglobe 115.1 - - 115.1
Amortization - (1.3) (0.9) (2.2)
Effect of movement in exchange rates (0.4) - - (0.4)
At 31 December 2019 599.0 0.3 0.5 599.8
Cost 1,921.9 74.0 4.8 2,000.7
Accumulated amortization and impairment (1,322.9) (73.7) (4.3) (1,400.9)
At 31 December 2019 599.0 0.3 0.5 599.8
Movements in the carrying amount:
Investments
- - 0.6 0.6
Amortization
- (0.3) (0.5) (0.8)
Post completion settlement Fertiglobe
(115.1) - - (115.1)
Effect of movement in exchange rates
2.0 - - 2.0
At 31 December 2020
485.9 - 0.6 486.5
Cost
1,808.8 74.0 5.4 1,888.2
Accumulated amortization and impairment
(1,322.9) (74.0) (4.8) (1,401.7)
At 31 December 2020
485.9 - 0.6 486.5
Goodwill
Goodwill has been allocated to the cash generating units as follows:
Cash generating units
$ millions
Reporting segment
2020
2019Egyptian Fertilizers Company (‘EFC’) Fertiglobe
440.0
440.0Fertil Fertiglobe
-
115.1OCI Beaumont Methanol US
23.0
23.0OCI Nitrogen Nitrogen Europe
22.9
20.9Total
485.9
599.0Licenses and trademarks
The licenses and trademarks mainly relate to the customer relationships, trademarks and technology
assets of OCI Nitrogen. These intangible assets were identified during the acquisition of OCI Nitrogen
in 2010. The useful life of the customer relationships, trademarks and technology assets are respectively
5 to 10 years, 3 years and 5 years.
Goodwill impairment testing
The determination of the recoverable amounts for the cash generating units requires significant
judgments and estimates, including projections of future cash flows from the businesses. The
recoverable amounts have been estimated based on value in use.
The tests were carried out by discounting future cash flows to be generated from the continuing use of
the cash-generating units to which the goodwill applies and on the assumption of an indefinite life. Key
assumptions used in the calculation of recoverable amounts are the discount rate, the terminal value
growth rate, selling price outlook per product, natural gas prices and the number of expected operating
days per plant. Selling price and natural gas price assumptions are based on a published independent
price outlook prepared by global experts. The other assumptions used are based on past experiences
and external sources, but that are unpredictable and inherently uncertain.
The impairment tests are based on specific estimates for cash flow projections for the years 2021 to
2025 (this period captures the cyclical nature of the industry). For the subsequent years, the residual
values were calculated based on the average EBITDA margin of the last two years of the projection
period and whereby a perpetual growth rate of 1.45% was used. The estimated cash flows are
discounted using a present value technique.
The following rates were applied in performing the impairment test:
Percentage
2020 2019
EFC OCI Beaumont OCI Nitrogen EFC OCI Beaumont OCI Nitrogen
Pre-tax discount rate 9.8% 9.9%
11.54% 8.30% 8.74%
12.5%Perpetual growth rate 2.0% 2.0%
1.45% 1.45% 1.45%
2.0%NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
1458. Goodwill and other intangible assets
(continued)
Result of the impairment test
For all cash generating units the recoverable values significantly exceed their carrying amounts. No
reasonably possible change in a key assumption would cause the cash generating unit’s carrying
amount to exceed the recoverable amount.
9. Trade and other receivables
$ millions
2020 2019
Trade receivables (net)
271.3
220.9Loans and trade receivables due from related parties (note 30)
58.5
55.7Prepayments
66.2
30.3Other tax receivables
112.2
90.7Supplier advanced payments
30.9
24.7Commodity derivatives
16.0
3.3Foreign currency derivatives
3.3
1.7Other receivables
46.0
85.2Total
604.4
512.5Non-current
3.5
4.1Current
600.9
508.4Total
604.4
512.5In 2018, the Group entered into a securitization agreement to sell certain trade receivables to an
external financial institution. By doing so, the Group is able to receive cash flows from selected debtors
sooner than would normally be the case. Upon transfer of the balances, OCI derecognizes the trade
receivables, since substantially all risks and rewards of ownership are transferred. The agreement
permits securitization of trade receivables up to EUR 180.0 million (USD 218.4 million) (2019: EUR 180.0
million). As per 31 December 2020 an amount of EUR 122.6 million (USD 148.7 million) (2019: EUR
116.3 million) of trade receivables were transferred. The transferred trade receivables are pledged as
security under the securitization program.
The other tax receivable contains an amount of EGP 900 million (USD 57.2 million) relating to a payment
made to the Egyptian Tax Authorities as part of the tax claim which will be refunded upon settlement of
the tax claim. Reference is made to note 28 ‘OCI S.A.E. tax dispute’.
The carrying amount of ‘Trade and other receivables’ as at 31 December 2020 approximates its fair
value.
The aging of current trade receivables at the reporting date were as follows:
$ millions
2020 2019
Neither past due nor impaired
223.2
212.5Past due 1 - 30 days
42.4
7.0Past due 31 - 90 days
3.4
0.8Past due 91 - 360 days
1.5
0.6More than 360 days
0.8
-Total
271.3
220.9Management believes that the unimpaired amounts that are past due by more than 30 days are
collectible in full, based on historic payment behavior and extensive analysis of customer credit risk,
including underlying customers’ credit ratings if they are available. The Group has not recognized any
allowance for trade receivables.
10. Equity-accounted investees
(i) The following table shows the movements in the carrying amount of the Group’s associates
and joint ventures:
$ millions
2020 2019
At 1 January
506.9
566.6Share in income
(36.7)
(56.6)Intercompany profit elimination on upstream transactions
(0.1)
(1.3)Dividend
(3.0)
(1.6)Effect of movement in exchange rates
1.6
(0.2)At 31 December
468.7
506.9Joint ventures
1.1
2.7Associates
467.6
504.2Total
468.7
506.9NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
14610. Equity-accounted investees
(continued)
(ii) The Group has interests in the following associates and joint ventures:
Name Type Participation %
Participation via
CountryFirewater LLC (Natgasoline) Associate Firewater B.V. United States 50.0
Sitech Manufacturing Services C.V. Associate OCI Nitrogen B.V. The Netherlands 35.0
Sitech Utility Holding Beheer B.V. Associate OCI Nitrogen B.V. The Netherlands 40.0
Sitech Utility Holding C.V. Associate OCI Nitrogen B.V. The Netherlands 40.0
Sitech Services B.V. Associate OCI Nitrogen B.V. The Netherlands 23.0
White Rock Insurance PCC Ltd. Associate OCI N.V. Holding The Netherlands 5.0
Nitrogen Iberian Company SL. Joint venture OCI Nitrogen B.V. Spain 50.0
Shanxi Fenghe Melamine
Company Ltd. Joint venture OCI Nitrogen B.V. China 49.0
Fitco OCI Agro S.A. Joint venture
Fertiglobe Holding
Ltd.
Uruguay 50.0
(iii) The following table summarizes the financial information of OCI’s associates and joint ventures
(on a 100% basis):
$ millions
2020 2019
Associates
Joint
ventures Total Associates
Joint
ventures Total
Non-current assets
2,106.9 1.2 2,108.1
2,254.7 1.9 2,256.6
Current assets 5.7 283.0
312.5 2.8 315.3
277.3Non-current
liabilities - (1,186.7)
(1,154.8) - (1,154.8)
(1,186.7)Current liabilities (2.2) (307.2)
(291.4) (1.9) (293.3)
(305.0)Net assets 5.4 1,045.7
973.2 2.1 975.3
1,040.3Income 45.2 842.6
804.9 34.9 839.8
797.4Expenses (47.4) (950.1)
(869.8) (36.6) (906.4)
(902.7)Net (loss) / profit (2.2) (107.5)
(64.9) (1.7) (66.6)
(105.3)Associates
The following chart summarizes the financial information of significant associates (on a 100% basis):
Firewater LLC
(Natgasoline)
Sitech
Services B.V.
$ millions
2020 2019 2020 2019
Non-current assets
1,977.2
2,131.2128.9
117.3Current assets (excluding cash and cash equivalents)
122.6
81.431.1
34.0Cash and cash equivalents
3.2
24.935.1
29.8Non-current liabilities
(1,078.1)
(1,115.0)(76.7)
(71.7)Current liabilities
(119.1)
(138.9)(55.9)
(56.1)Net assets
905.7
983.662.5
53.3Group’s share of net assets
452.8
491.814.4
12.3Revenues
256.2
285.1204.3
202.2Depreciation
(173.3)
(145.0)(13.3)
(13.1)Interest income
0.1
0.4-
-Interest expense
(62.9)
(72.9)(1.4)
(1.5)(Loss) / profit before taxes
(78.2)
(121.0)19.4
19.2Tax expense
-
-(6.1)
(3.5)(Loss) / profit after taxes
(78.2)
(121.0)13.3
15.7Other comprehensive income
-
--
-Total comprehensive income
(78.2)
(121.0)13.3
15.7Group’s share in total comprehensive income
(39.0)
(60.5)3.1
3.6Dividends
-
-9.1
6.1Included in the associates is Firewater LLC, the holding company of Natgasoline LLC, which is
a methanol plant in Texas USA, and Sitech, which operates at the Chemelot site in Geleen, the
Netherlands, where the factory of OCI Nitrogen is. The Chemelot site is also used by other companies.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
14711. Financial assets at fair value through other comprehensive income
$ millions
2020 2019
Infrastructure and Growth Capital Fund LP (UAE)
6.3
6.8Notore Chemical Industries (Mauritius)
20.8
23.2Orascom Construction PLC (UAE)
2.9
3.4Total
30.0
33.4Non-current
30.0
33.4Current
-
-Total
30.0
33.4The Group holds an investment in the Infrastructure and Growth Capital Fund LP, which is managed
by the Abraaj Group. Abraaj Holdings and Abraaj Investment Management are in provisional liquidation
in the Cayman Islands and their court-appointed joint provisional liquidators, Deloitte and PwC, are
overseeing the restructuring of Abraaj’s debt.
The investment in Notore Chemical Industries represents a 13.18 percent shareholding. Further, OCI
N.V. holds shares in Orascom Construction PLC.
12. Income taxes
12.1 Income tax in the statement of profit or loss
$ millions
2020 2019
Current tax
(18.3)
1.9Deferred tax
(26.2)
(23.6)Total income tax reported in profit or loss
(44.5)
(21.7)Current tax expense
$ millions
2020 2019
Current year
(27.1)
4.6Dividend withholding tax
7.8
(7.8)Changes in estimates relating to prior years
1.0
5.1Income tax benefit / (expense) reported in profit or loss
(18.3)
1.9Deferred tax expense
$ millions
2020 2019
Origination and reversal of temporary differences
74.3
84.0Movement in uncertain tax positions
(30.4)
(27.2)Changes in tax rates
(4.2)
(1.7)Recognition of previously unrecognized tax assets
2.9
-Unrecognized tax assets
(56.6)
(76.1)Dividend withholding tax
(12.2)
(2.6)Income tax benefit / (expense) reported in profit or loss
(26.2)
(23.6)12.2 Other comprehensive income
$ millions
2020 2019
Cash flow hedges, effective portion of changes in fair value
(1.9)
-Income tax benefit / (expense) reported in OCI
(1.9)
-NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
14812.3 Reconciliation of effective tax rate
OCI’s operations are subject to income taxes in various foreign jurisdictions. The statutory income tax
rates vary from 0.0% to 30.5%, which results in a difference between the effective income tax rate and
the Netherlands’ statutory income tax rate of 25.0%.
Reconciliation of the statutory income tax rate in the Netherlands with the effective income tax rate can
be summarized as follows:
$ millions
2020 % 2019 %
Profit / (loss) before income tax
(49.6)
(278.5)Enacted income tax rate in the
Netherlands
25%
25%
Tax calculated at the enacted Dutch
tax rate
12.4 25.0
69.6 25.0
Effect of tax rates in foreign jurisdictions 4.1
9.8 19.8
11.5Expenses non-deductible (18.4)
(28.8) (58.1)
(51.3)Income not subject to tax 7.4
19.0 38.3
20.7Adjustments prior years 1.8
1.0 2.0
5.1Change in tax rates (0.6)
(4.2) (8.4)
(1.7)Recognition of previously unrecognized
tax assets -
2.9 5.8
-Unrecognized tax assets (27.3)
(56.6) (114.1)
(76.1)Dividend withholding tax (0.9)
7.8 15.7
(2.6)Uncertain tax positions 1.1
(7.5) (15.1)
3.1Other -
(0.3) (0.6)
-Total income tax in profit or loss (7.8)
(44.5) (89.7)
(21.7)The effective income tax rate is (89.7%) (2019: 7.8%), mainly due to (i) unrecognized tax assets for an
amount of USD (56.6) million mainly relating to BioMCN, IFCo, Natgasoline and OCI NV not meeting the
recognition criteria, (ii) expenses non-deductible for an amount of USD (28.8) million and (iii) income not
subject to tax for an amount of USD 19.0 million. The non-deductible expenses mainly relate to interest
expense that is limited under local interest deduction limitation rules and non-deductable shareholder
costs.
The income not subject to tax mainly relates to tax exemption on export sales as well as the application
of free trade zones for several entities within the Group.
The Group believes that its accruals for tax liabilities are adequate for all open tax years based on its
assessment of many factors, including interpretations of tax law and prior experience.
12.4 Deferred income tax assets and liabilities
Changes in deferred tax asset and liabilities (net):
$ millions
2020 2019
At 1 January
(483.7)
(173.3)Profit or loss
(26.2)
(23.6)Equity
-
-Business combination Fertiglobe
-
(287.4)Effect of movement in exchange rates
(4.8)
0.6At 31 December
(514.7)
(483.7)Recognized deferred tax assets and liabilities:
Assets Liabilities Net
$ millions
2020 2019 2020 2019 2020 2019
Intangible assets
81.6
114.0(62.7)
(62.7)18.9
51.3Property, plant and equipment
-
0.1(610.7)
(612.2)(610.7)
(612.1)Inventory
1.9
2.8(3.3)
(2.5)(1.4)
0.3Investment in partnership
-
-(89.6)
(74.1)(89.6)
(74.1)Trade and other receivables
-
-(0.4)
(0.2)(0.4)
(0.2)Loans and borrowings
52.0
60.6(1.1)
-50.9
60.6Trade and other payables
12.4
14.9-
(1.3)12.4
13.6Provisions
-
-(6.3)
(8.7)(6.3)
(8.7)Uncertain tax positions
-
-(57.6)
(27.2)(57.6)
(27.2)Undistributed earnings
-
-(15.6)
(3.4)(15.6)
(3.4)Operating losses carry forward
and tax credits
184.7
116.2-
-
184.7
116.2
Total
332.6
308.6(847.3)
(792.3)(514.7)
(483.7)Netting of fiscal positions
(331.8)
(302.1)331.8
302.1-
-Amounts recognized in
the Statement of Financial
Position
0.8
6.5(515.5)
(490.2)(514.7)
(483.7)NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
14912.4 Deferred income tax assets and liabilities
(continued)
Deferred tax liabilities relating to intangible assets mainly relates to goodwill of EFC for USD 62.7
million. This deferred tax liability will be reversed in case the asset is impaired. Deferred tax liabilities
recognized in relation to property, plant and equipment will be realized over the depreciation period of
the related asset, and mainly relate to Fertil (USD 265.9 million), IFCo (USD 235.0 million), EFC (USD
69.7 million) and OCI Nitrogen (USD 25.9 million). The uncertain tax position of USD 57.6 million is
related to a difference in interpretation of local regulation with local tax authorities, this is currently under
discussion although no agreement is expected on the treatment within a short timeframe. Furthermore,
the deferred tax liability ‘investment in partnership’ (USD 89.6 million) relates to a temporary difference
related to OCI USA Inc’s investment in OCI Beaumont. The deferred tax liability ‘undistributed earnings’
relates to income tax consequences of undistributed earnings of subsidiaries that will reverse in the
foreseeable future. The Company does not anticipate any other income tax consequences resulting
from the undistributed earnings of subsidiaries.
Deferred tax assets relate to temporary differences, tax credits and tax losses carry forward. The
Company has net tax losses carry forward and tax credits totalling USD 611.2 million, for which an
amount of USD 426.5 million has not been recognized. The losses carry forward mainly relate to the US
operations (USD 364.7 million), Dutch operations (USD 40.2 million) and Egyptian operations (USD 47.9
million). Tax credits are available amounting to USD 94.7 million mainly relating to the US operations.
Uncertain tax positions
The group is subject to the application of complex tax laws in multiple jurisdictions. Application of
these complex tax laws may lead to uncertainties in determining tax positions. We aim to resolve these
uncertainties in discussions with the tax authorities. The financial effect of the existing uncertainties
per balance sheet date are determined in accordance with IAS 12 and IFRIC 23, which requires us
to estimate the potential outcome of any tax position. Our estimate for the potential outcome of any
uncertain tax position is judgmental.
As of 31 December 2020, the Group recorded uncertain tax positions to an amount of USD 57.6 million
which is classified as a deferred tax liability. Expected interest and penalties related to uncertain income
tax liabilities have been accrued for and are included in the uncertain tax positions and in the income tax
expense. In addition to the uncertain tax liability, the Group also has a contingent tax asset that currently
does not meet the recognition criteria of IFRIC 23. For more information we refer to note 28.
Expiration scheme of gross unrecognized carry forward tax losses, tax credits and deferred temporary
tax assets:
2020
$ millions
Less than
1 year
Between
1 and 5
years
Between
5 and 10
years
Between
10 and 15
years
Between
15 and 20
years Unlimited
Total
Temporary differences
- - - - - -
-
Tax losses and tax
credit carry forwards
67.2 309.7 128.9 - 359.2 532.1
1,397.1
Tax assets –
unrecognized
67.2 309.7 128.9 - 359.2 532.1 1,397.1
2019
1
$ millions
Less than
1 year
Between
1 and 5
years
Between
5 and 10
years
Between
10 and 15
years
Between
15 and 20
years Unlimited
Total
Temporary differences - - - - - - -
Tax losses and tax
credit carry forwards 19.7 145.5 262.1 9.4 399.9 313.8
1,150.4
Tax assets –
unrecognized 19.7 145.5 262.1 9.4 399.9 313.8
1,150.4
1
In the Annual Report 2019 amounts were presented net.
The above unrecognized temporary differences, tax losses and tax credit carryforwards relate to
tax jurisdictions in which OCI has suffered a tax loss in the current or a preceding period. Significant
judgment is required in determining whether deferred tax assets can be utilized. OCI determines this
based on expected taxable profits arising from the reversal of recognized deferred tax liabilities and
based on budget, cash flow forecasts and impairment models and the recent history of taxable results.
Where utilization is not considered probable, deferred tax assets are not recognized.
Changes in income tax receivables and payables:
$ millions
2020
2019At 1 January
(5.6)
(67.7)Profit or loss
(27.1)
1.9Changes in estimates relating to prior years
1.0
-Other comprehensive income
(1.9)
-Payments
25.4
59.9Effect of movement in exchange rates
0.7
0.3At 31 December
(7.5)
(5.6)Income tax receivable
2.8
3.2Income tax payables
(10.3)
(8.8)Total
(7.5)
(5.6)NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
15013. Inventories
$ millions
2020
2019Finished goods
149.0
189.3Raw materials and consumables
30.4
29.8Spare parts, fuels and others
114.4
89.6Total
293.8
308.7During 2020, the total write-downs amount to USD 1.4 million (2019: USD 5.2 million) of which USD
1.0 million (2019: USD 2.6 million) relates to spare parts. During 2020 there were USD 5.2 million of
reversals of write downs (2019: USD 4.4 million). Inventory amounting to USD 31.2 million (2019: USD
43.3 million) has been pledged as security for external loans of IFCo. Reference is made to note 18.
14. Cash and cash equivalents
$ millions
2020
2019Cash on hand
0.2
0.2Bank balances
632.0
560.3Restricted cash
54.1
40.0Total
686.3
600.5Restricted cash
Restricted cash of USD 47.4 million (2019: USD 23.1 million) is held as part of IFCo’s debt service
requirements for the outstanding bonds, of which USD 39.4 million (2019: USD 15.0 million) is held as a
required deposit in a major maintenance reserve account and is to be used to fund capital expenditure.
The remaining restricted balances are held as collateral against letters of credit and letters of guarantees
issued.
15. Equity attributable to owners of the Company
The movements in the number of shares can be summarized as follows:
2020
2019
Number of shares at 1 January
210,306,101
210,306,101Number of issued shares
-
-On issue at 31 December – fully paid
210,306,101
210,306,101
Par value per share (in EUR)
0.02
0.02At 31 December (in millions of USD)
5.6
5.6
The authorized capital of the Company amounts to EUR 12.0 million. The authorized capital is divided
into 600 million shares, with a nominal value of EUR 0.02 each.
Movements in equity attributable to owners of the Company in 2020:
• The post-completion adjustment with ADNOC resulted in an increase in retained earnings of USD
48.3 million and a decrease in non-controlling interests of USD 59.6 million. Reference is made to note
2.2.1. and note 17.
•
•
An amount of USD 8.0 million related to share-based compensation expense was recognized in
retained earnings.
Movements in equity attributable to owners of the Company in 2019:
• The business combination Fertiglobe with ADNOC resulted in an increase in retained earnings of USD
674.8 million and an increase in non-controlling interests of USD 1,093.3 million. Reference is made to
note 2.2.1. and note 17.
• An amount of USD 6.6 million related to share-based compensation expense was recognized in
retained earnings.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
15116. Reserves
$ millions
Hedge
reserve
Financial
assets at fair value
through other
comprehensive
income
1
Currency
translation
Treasury
shares Total
At 1 January 2019 (0.4) 0.1 (223.8) (24.9) (249.0)
Increase in hedge reserve 0.2 - - - 0.2
Currency translation differences - - 8.0 - 8.0
Financial assets at fair value through
other comprehensive income
- (3.4) - - (3.4)
Other comprehensive income 0.2 (3.4) 8.0 - 4.8
Treasury shares sold / delivered - - - 7.7 7.7
Treasury shares acquired - - - (1.3) (1.3)
At 31 December 2019
(0.2) (3.3) (215.8) (18.5) (237.8)
Increase in hedge reserve
5.9 - - - 5.9
Currency translation differences
- - (106.6) - (106.6)
Financial assets at fair value through
other comprehensive income
- (3.7) - - (3.7)
Other comprehensive income
5.9 (3.7) (106.6) - (104.4)
Treasury shares sold / delivered
- - - 3.8 3.8
Treasury shares acquired
- - - - -
At 31 December 2020
5.7 (7.0) (322.4) (14.7) (338.4)
1
Cannot be subsequently reclassified to profit or loss.
OCI is a company incorporated under Dutch law. In accordance with the Dutch Civil Code, legal
reserves have to be established in certain circumstances. The hedging reserve, the financial assets
at fair value through other comprehensive income reserve, the currency translation reserve and other
legal reserves are legal reserves that limit distributions to shareholders to the extent that these reserves
individually have a credit balance.
Treasury shares
During the financial year ended 31 December 2020 the company acquired zero
shares and sold and
delivered out of share-based payment plans 160,327 shares.
2020 2019
Number of shares
561,926
722,253Average carrying value per share (USD)
25.13
23.05Total (In millions USD)
14.1
16.6Foreign exchange effect
0.6
1.9Total carrying value of treasury shares
(In millions of USD)
14.7
18.517. Non-controlling interests
2020
$ millions Fertil EFC
Egyptian
Basic
Industries
Corporation
Sorfert
Algeria
Spa Other Total
Non-controlling
interests
42.00% 42.06% 65.20% 70.43% - -
Non-current assets
753.3 678.7 193.9 551.7 23.0 2,200.6
Current assets
81.6 50.8 47.5 301.8 1,263.5 1,745.2
Non-current liabilities
(144.1) (125.3) (4.7) (233.8) (405.3) (913.2)
Current liabilities
(41.0) (119.5) (60.5) (61.2) (1,210.3) (1,492.5)
Net assets
649.8 484.7 176.2 558.5 (329.1) 1,540.1
Revenues
200.2 151.3 77.7 241.5 812.6 1,483.3
Profit
1.2 21.8 (11.3) 77.6 (5.7) 83.6
Other comprehensive
income
- - - (40.2) 1.5 (38.7)
Total comprehensive
income
1.2 21.8 (11.3) 37.4 (4.2) 44.9
Dividend cash flows
- - - - (43.2) (43.2)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
15217. Non-controlling interests
(continued)
2019
$ millions Fertil EFC*
Egyptian
Basic
Industries
Corporation*
Sorfert
Algeria
Spa* Other Total
Non-controlling interests 42.00% 42.06% 65.20% 70.43% - -
Non-current assets 846.7 680.3 197.8 650.6 26.3 2,401.7
Current assets 57.2 31.4 42.4 290.3 1,169.9 1,591.2
Non-current liabilities (154.9) (183.9) (4.7) (314.5) (342.5) (1,000.5)
Current liabilities (28.9) (64.1) (38.1) (283.6) (1,116.5) (1,531.2)
Net assets 720.1 463.7 197.4 342.8 (262.8) 1,461.2
Revenues 55.1 37.8 70.5 186.5 352.8 702.7
Profit (6.9) 2.6 (1.0) 41.8 (2.0) 34.5
Other comprehensive
income
- - - (3.6) - (3.6)
Total comprehensive
income
(6.9) 2.6 (1.0) 38.2 (2.0) 30.9
Dividend cash flows - - - - (6.1) (6.1)
* NCI in EFC, EBIC and Sorfert increased in 2019 due to the Fertiglobe business transaction and the
transfer of 42% in OCI MENA, reference is made to note 2.2.1.
Fertiglobe 2019 business combination with ADNOC (NCI)
OCI N.V. owns 58% shares in one of its subsidiaries, Fertiglobe, which controls 100% of the voting
powers and economic returns from Fertil (and holds the Group’s share in OCI MENA). For purchase
accounting purposes, the company has determined the fair value of the shares in Fertil as described
above. As OCI N.V. retains control over shares that were already owned by Fertiglobe in OCI MENA,
these assets and liabilities are not revalued as part of the purchase accounting. As a result, the NCI in
Fertiglobe is the sum of 42% of the fair value of Fertil and 42% of the OCI MENA net assets as at 30
September 2019. OCI N.V.’s disposal of 42% ownership in Fertiglobe, whilst retaining control in the
subsidiary was treated as an equity transaction. NCI of USD 382.7 million is recognized as part of the
disposal of 42% ownership in its former OCI MENA net assets, while the difference between 42% of the
fair value of OCI MENA and the book value resulted in an equity increase of USD 674.8 million.
The NCI recognized as part of the non-controlling interests held by ADNOC in Fertil amounted to
USD 710.6 million as per September 2019. The fair value of Fertil has been measured by applying
a discounted cashflow method, cash flows beyond the forecasted period of five years have been
extrapolated using a 2% growth rate. The pre-tax WACC used to determine the expected discounted
future cash flows is 9.0%. Reference is made to note 2.2.1.
Movements in equity attributable to non-controlling interests in 2020:
•
•
The reduction of declared dividends to non-controlling interests in the amount of USD 125.4 million
relates to the dividends declared by Sorfert relating to the financial year 2018, that were cancelled by a
resolution of the general meeting of shareholders of Sorfert in December 2020.
•
Total dividends declared to non-controlling interests amounted to USD 49.2 million.
•
•
Impact difference in profit sharing non-controlling interests: In the partnership agreement of Sorfert
between OCI and the partner, a profit-sharing arrangement is agreed, where the other investor will
receive a relatively higher portion of dividends in compensation for lower natural gas prices arranged
for by the partner. As a result of this agreement the non-controlling interests increased by USD 17.4
million during 2020.
Movements in equity attributable to non-controlling interests in 2019:
•
Total dividends declared to non-controlling interests amounted to USD 143.3 million, of which USD
137.2 million related to Sorfert.
• Impact difference in profit sharing non-controlling interests: In the partnership agreement of Sorfert
between OCI and the partner, a profit-sharing arrangement is agreed, where the other investor will
receive a relatively higher portion of dividends in compensation for lower natural gas prices arranged
for by the partner. As a result of this agreement the non-controlling interests increased by USD 10.5
million during 2019.
18. Loans and borrowings
$ millions
2020 2019
At 1 January
4,662.3
4,580.3Proceeds from loans
2,070.4
1,765.5Redemptions of loans
(2,396.0)
(1,654.4)Newly incurred transaction costs
(14.6)
(24.1)Amortization of transaction costs / (bond) premiums
34.1
25.6Effect of movement in exchange rates
60.4
(24.4)Debt modification gain
-
(6.2)At 31 December
4,416.6
4,662.3Non-current
4,226.9
4,392.7Current
189.7
269.6Total
4,416.6
4,662.3The effect of movement in exchange rate mainly relates to EUR and DZD denominated loans, which
are different from the Group’s presentation currency. Information about the Group’s exposure to
interest rate, foreign currency and liquidity risk is disclosed in the financial risk and capital management
paragraph in note 6.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
15318. Loans and borrowings
(continued)
Borrowing company
Type of
loan
Principal amount
($ millions) Interest rate Date of maturity
Carrying
amount
1
($ millions)
Long-term
portion
($ millions)
Short-term
portion
($ millions)
Fair value
($ millions) Collateral / Guarantee given (if applicable)
Sorfert Algeria SPA
(‘Sorfert’)
Secured
USD 961.3
(DZD 114,440.0)
Algerian bank interest rate
plus rate of 1.95%
June 2026
398.3 325.8 72.5 n/a
Debt service reserve account, ban for any disposal or
decrease of the Company share and assets
Iowa Fertilizer Company
(‘IFCo’)
Secured
USD 120.0
USD 429.0
USD 147.2
USD 425.4
Fixed: 3.125%
Fixed: 5.25%
Fixed 5.875%
Fixed 5.25%
December 2022
December 2025
December 2027
December 2037
80.0
426.1
139.8
412.1
43.4
426.1
139.8
412.1
36.6
-
-
-
80.7
465.4
147.7
424.3
Certain bank accounts, property of IFCo, inventories,
all funds, including equity contributions of
USD 762.0 million by OCI
Egyptian Fertilizers
Company (‘EFC’)
Secured USD 150.0 LIBOR + 2.00% October 2025
134.2 108.4 25.8 136.7
The loan is guaranteed, jointly and severally, by Fertiglobe
Holding Ltd, Egyptian Fertilizers Company S.A.E., Ruwais
Fertilizer Industries LLC, OCI Fertilizer Trading Ltd, Fertiglobe
Distribution Limited and OCI Fertilizer Trade & Supply B.V.
Fertiglobe Holding Ltd. Secured USD 160.0 LIBOR + 2.00% October 2025
138.1 110.6 27.5 140.7
The loan is guaranteed, jointly and severally, by Fertiglobe
Holding Ltd, Egyptian Fertilizers Company S.A.E., Ruwais
Fertilizer Industries LLC, OCI Fertilizer Trading Ltd, Fertiglobe
Distribution Limited and OCI Fertilizer Trade & Supply B.V.
Fertiglobe Holding Ltd. Secured USD 75.0 LIBOR + 2.00% October 2025
- - - -
N/aOCI N.V. (‘OCI’)
Senior
Secured
Notes
USD 400.0
USD 489.0
(EUR 400.0)
Fixed at 4.625%
Fixed at 3.625% for
EUR denominated notes
October 2025
October 2025
395.6
483.8
395.6
483.8
-
-
416.0
506.8
The Notes are guaranteed, jointly and severally, by OCI
Chemicals B.V., OCI Fertilizers B.V., OCI Fertilizer International
B.V., OCI Intermediate B.V., BioMethanol Chemie Nederland
B.V. and BioMethanol Chemie Holding II B.V., OCI Nitrogen
B.V., OCI Chem 4 B.V., OCI Partners LP, OCI Beaumont LLC
OCI N.V. (‘OCI’)
Senior
Secured
Notes
USD 855.8
(EUR 700.0)
USD 600.0
Fixed: 3.125%
Fixed: 5.250%
November 2024
November 2024
845.1
591.6
845.1
591.6
-
-
878.9
623.3
The Notes are guaranteed, jointly and severally, by OCI
Chemicals B.V., OCI Fertilizers B.V., OCI Fertilizer International
B.V., OCI Intermediate B.V., BioMethanol Chemie Nederland
B.V. and BioMethanol Chemie Holding II B.V., OCI Nitrogen
B.V., OCI Chem 4 B.V., OCI Partners LP, OCI Beaumont LLC
OCI N.V. (‘OCI’) Secured USD 850.0 LIBOR + 3.50% April 2023
344.6 344.6 - 350.0
Guaranteed, jointly and severally, by OCI Chemicals B.V.,
OCI Fertilizers B.V., OCI Fertilizer International B.V., OCI
Intermediate B.V., BioMethanol Chemie Nederland B.V. and
BioMethanol Chemie Holding II B.V., OCI Nitrogen B.V., OCI
Chem 4 B.V., OCI Partners LP, OCI Beaumont LLC
OCI Fertilizer Trading Ltd.
(‘OFT’)
Revolver USD 75.0 LIBOR + 2.50%
Renewed
annually
- - - -
n/a
OCI Nitrogen
Inventory
financing
USD 70.2 (EUR
57.4)
1.25%
No defined
maturity, facility
is uncommitted
with monthly roll
overs
27.3 - 27.3 27.3
Stand by letter of credit of EUR 9.0 million (USD 10.1 million)
and OCI N.V. guarantee of EUR 90 million (USD 100.9 million)
Total 31 December 2020
4,416.6 4,226.9 189.7 n/a
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
15418. Loans and borrowings
(continued)
Borrowing company
Type of
loan
Principal amount
($ millions) Interest rate Date of maturity
Carrying
amount
1
($ millions)
Long-term
portion
($ millions)
Short-term
portion
($ millions)
Fair value
($ millions) Collateral / Guarantee given (if applicable)
Sorfert Algeria SPA
(‘Sorfert’)
Secured
USD 961.3
(DZD 114,440.0)
Algerian bank interest
rate plus rate of
1.95% per annum
June 2026 539.9 439.8 100.1 n/a
Debt service reserve account, ban for any disposal or
decrease of the Company share and assets
Iowa Fertilizer Company
(‘IFCo’)
Secured
USD 120.0
USD 429.0
USD 147.2
USD 425.4
Fixed: 3.125%
Fixed: 5.25%
Fixed 5.875%
Fixed 5.25%
December 2022
December 2025
December 2027
December 2037
118.6
424.9
138.6
411.2
82.3
424.9
138.6
411.2
36.3
-
-
-
122.0
466.7
155.1
465.7
Certain bank accounts, property of IFCo, inventories,
all funds, including equity contributions
of USD 762.0 million by OCI
Egyptian Fertilizers
Company (‘EFC’)
Secured
USD 60.0
USD 100.0
USD 69.8
(EGP
1,120.0)
USD 220.0
LIBOR + 3.75%
LIBOR + 3.75%
CBE Mid Corridor +
0.75% margin for EGP
denominated borrowings
LIBOR + 3.75%
June 2025
June 2026
June 2025
June 2025
49.9
82.6
50.6
126.6
44.3
72.5
44.6
112.1
5.6
10.1
6.0
14.5
51.0
84.3
51.4
127.5
Pledge EFC shares 99.9% owned by ‘Orascom Fertilizer Plant
Maintenance’. Power of Attorney for perfection of commercial
and real estate mortgages. OCI will pay for shortfalls
OCI N.V. (‘OCI’)
Senior
Secured
Notes
USD 650.0
USD 448.5 (EUR
400.0)
Fixed at 6.625%
Fixed at 5.0% for EUR
denominated notes
April 2023
April 2023
639.8
441.0
639.8
441.0
-
-
677.6
466.7
The Notes are guaranteed, jointly and severally, by OCI
Chemicals B.V., OCI Fertilizers B.V., OCI Fertilizer International
B.V., OCI Intermediate B.V., BioMethanol Chemie Nederland
B.V. and BioMethanol Chemie Holding II B.V., OCI Nitrogen
B.V., OCI Chem 4 B.V., OCI Partners LP, OCI Beaumont LLC
OCI N.V. (‘OCI’)
Senior
Secured
Notes
USD 784.9
(EUR 700.0)
USD 600.0
Fixed: 3.125%
Fixed: 5.250%
November 2024
November 2024
772.8
590.6
772.8
590.6
-
-
818.9
625.5
The Notes are guaranteed, jointly and severally, by OCI
Chemicals B.V., OCI Fertilizers B.V., OCI Fertilizer International
B.V., OCI Intermediate B.V., BioMethanol Chemie Nederland
B.V. and BioMethanol Chemie Holding II B.V., OCI Nitrogen
B.V., OCI Chem 4 B.V., OCI Partners LP, OCI Beaumont LLC
OCI N.V. (‘OCI’) Secured USD 185.0 LIBOR + 4.00% April 2023 178.2 178.2 - 178.2
Guaranteed, jointly and severally, by OCI Chemicals B.V.,
OCI Fertilizers B.V., OCI Fertilizer International B.V., OCI
Intermediate B.V., BioMethanol Chemie Nederland B.V. and
BioMethanol Chemie Holding II B.V., OCI Nitrogen B.V., OCI
Chem 4 B.V., OCI Partners LP, OCI Beaumont LLC
OCI Fertilizer Trading Ltd.
(‘OFT’)
Revolver USD 75.0 LIBOR + 2.50%
Renewed
annually
32.7 - 32.7 32.7 n/a
OCI Nitrogen
Inventory
financing
USD 64.3 (EUR
57.4)
1.25%
No defined
maturity, facility
is uncommitted
with monthly roll
overs
64.3 - 64.3 64.3
Stand by letter of credit of EUR 9.0 million (USD 10.1 million)
and OCI N.V. guarantee of EUR 90 million (USD 100.9 million)
Total 31 December 2019 4,662.3 4,392.7 269.6 n/a
1
As at 31 December 2020 the carrying amount of loans and borrowings excluded interest of
USD 24.4 million (2019: USD 79.1 million)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
15518. Loans and borrowings
(continued)
Covenants
Certain loan agreements include financial covenants. The definitions for calculating the financial
covenants applicable to the facilities within the Group can be summarized as follows:
• Debt Service Coverage Ratio: Income Available (revenue earned less operating expenses) to Debt
Service (net finance charges including the capital element of finance leases) or gross profit less change
in working capital to interest and principal payments.
• Debt to Equity Ratio: Gross Debt (current and long-term debt obligations) to total Equity (the sole
capital of the borrower).
• Net Leverage Ratio: the Group’s Net Debt (meaning the aggregate amount of all obligations of the
Group, excluding intergroup loans and cash and cash equivalents, but including finance leases) to
adjusted EBITDA.
• Interest Coverage Ratio: EBITDA, EBIT or Distribution Receipts (cash received by the borrower by way
of dividends or repayments of loans) to Finance Charges (meaning finance payments in respect of
borrowings including the interest element of finance leases).
As per 31 December 2020 all financial covenants were met.
In the event the respective borrowing company’s would not comply with the covenant requirements,
in total an amount of USD 1,026.0
million of the loans would become immediately due. Refer to note
6.2 for additional discussion of the Company’s liquidity risk. The external borrowings include change in
control clauses that enable the lenders to call the financing provided.
Fair value measurement loans and borrowings
Except for the IFCo bonds, the senior secured notes of OCI N.V. and the loan of Sorfert, the fair value
of all other loans and facilities is calculated within hierarchy category level 2. The bonds of IFCo and
OCI N.V. are measured following hierarchy category 1. The fair value of the loan of Sorfert cannot be
determined as no observable market data is available.
New and amended financing arrangements in 2020
OCI N.V.
In October 2020 OCI N.V. completed a dual-tranche bond offering consisting of USD 400.0 million
senior secured fixed rate notes due 2025 and EUR 400.0 million senior secured fixed rate notes due
2025. The Dollar Notes bear interest at a rate of 4.625% per annum and the Euro Notes bear interest
at a rate of 3.625% per annum. The Notes were issued at par, are senior secured obligations of the
Company and are guaranteed by certain of the Company’s subsidiaries. Interest will be payable semi-
annually.
The proceeds from the offering, along with a drawing of approximately USD 290 million (equivalent)
under the Company’s revolving credit facility, were used to redeem the Company’s approximately USD
1,155 million (equivalent) euro and US dollar-denominated senior secured notes due 2023 and to pay
fees and expenses incurred in connection with the offering.
Fertiglobe
In October 2020, Fertiglobe completed a USD 385 million refinancing (USD 310 million term loan and
USD 75 million RCF) maturing in 2025 at an interest rate of LIBOR + 2.00%. This facility will replace the
existing credit facilities at EFC that would mature in 2025 and 2026 with an interest rate of LIBOR +
3.75% on USD borrowings and CBE mid corridor + 0.75% on EGP borrowings.
Proceeds from borrowings
Proceeds from borrowings in 2020 totaled an amount of USD 2,070.4 million, which consisted of the
net proceeds of the new financing arrangements of OCI N.V, EFC, Fertiglobe Holding, new proceeds
of the revolving credit facility at OCI N.V. and changes in the outstanding amounts at OCI Nitrogen and
IFCo.
Redemptions
Redemptions of borrowings in 2020 totaled an amount of USD 2,396.0 million, which consisted
of a partly repayment of bonds at OCI N.V., repayment of borrowings at EFC, partly repayment of
the revolving credit facility at OCI N.V. and regular installments for borrowings and changes in the
outstanding amounts of the revolving credit facilities at OCI Nitrogen, IFCo, Sorfert, EFC, Fertiglobe
Holding and OFT.
Undrawn bank facilities
As of 31 December 2020, the Group had not drawn external bank facilities in the amount of USD 700.0
million. This relates to a trade finance facility of OFT and OFTS of USD 75.0 million, a working capital
facility of IFCo of USD 50.0 million and external bank facilities of Fertiglobe Holding Ltd of USD 75.0
million and OCI N.V. of USD 500.0 million.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
15619. Lease obligations
The Group leases a number of office spaces, warehouses, land, employee accommodation, computers,
machinery and vehicles. Lease terms vary from 1 year to indefinite renewal options. Calculations of the
lease obligation for leases with indefinite renewal options are done using a lease term based on the
expected renewal periods and can be more than 100 years.
Lease obligations:
$ millions
Non-current lease
obligations
Current lease
obligations Total
At 1 January 2019 189.7 26.5 216.2
Movement in the carrying amount:
Payments - (30.1) (30.1)
Accretion of interest 3.9 1.9 5.8
Additions
18.8 7.9 26.7
Disposals (1.5) (0.3) (1.8)
Transfers (28.0) 28.0 -
Modifications (15.3) (2.9) (18.2)
Business combination Fertiglobe 76.4 10.0 86.4
Effect of movement in exchange
rates
0.3 - 0.3
At 31 December 2019 244.3 41.0 285.3
Movement in the carrying amount:
Payments
- (45.9) (45.9)
Accretion of interest
8.2 0.4 8.6
Additions
24.7 6.1 30.8
Disposals
(0.6) (0.7) (1.3)
Transfers
(40.1) 40.1 -
Modifications
3.6 1.4 5.0
Effect of movement in exchange
rates
8.5 1.2 9.7
At 31 December 2020
248.6 43.6 292.2
20. Trade and other payables
$ millions Note
2020 2019
Trade payables
298.6
281.7Trade payables due to related parties (30)
81.4
85.0Amounts payable under the securitization agreement
113.6
76.7Accrued interest to non-controlling interests
12.2
141.2Other payables
228.7
114.7Employee benefit liabilities
12.9
14.6Accrued expenses
235.8
202.1Accrued interest
24.4
79.1Deferred revenue
-
3.2Other tax payable
13.0
6.3Commodity derivative financial instruments
8.7
17.4Total
1,029.3
1,022.0Non-current
25.7
30.7Current
1,003.6
991.3Total
1,029.3
1,022.0Information about the Group’s exposure to currency and liquidity risk is included in note 6. The carrying
amount of ‘Trade and other payables’ approximates its fair value.
Derivative financial instruments
Derivative financial instruments consist of commodity gas hedges contracts in order to hedge future gas
price levels. The fair value of these contracts amounts to USD 8.7 million as per 31 December 2020
(2019: USD 17.4 million). All derivatives included in trade and other payables are classified in the fair
value hierarchy level 2.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
15721. Provisions
$ millions
Claims
and other
provisions
Donation
provision Total
At 1 January 2020
13.6 118.7 132.3
Recorded during the year
27.8 - 27.8
Used during the year
(0.2) - (0.2)
Reversed
- - -
Effect of movement in exchange rates
(0.8) 2.2 1.4
At 31 December 2020
40.4 120.9 161.3
Non-current
3.0 - 3.0
Current
37.4 120.9 158.3
Total
40.4 120.9 161.3
Claims and other provisions
The Group is involved in various litigations and arbitrations. In cases where it is probable that the
outcome of the proceedings will be unfavorable, and the financial outcome can be measured reliably,
a provision has been recognized. Reference is made to note 28 for detailed information with respect to
major ongoing litigations and claims for which no provision has been recognized.
Donation provision
On 13 November 2014, the Company announced that it had decided to transfer the rights to the
amounts receivable from the first installment already paid to the Egyptian Tax Authority in 2013 of EGP
2,500 million (approximately USD 360.0 million) to the Tahya Misr (‘Long Live Egypt’) Fund (reference is
made to note 28 for the claim in relation to the OCI S.A.E. tax dispute). No formal agreement has been
drafted with the Tahya Misr Fund yet and no payments have been made to the fund. The transfer of
rights has been approved by OCI’s Board of Directors on 12 November 2014.
Following the guidance under IAS 37 (constructive obligations) the Company has presented the transfer
of rights to the Tahya Misr Fund as a donation provision. In March 2015, the Company received a
cheque for EGP 1,904 million (approximately USD 266.2 million) from the Egyptian Authorities. At year
end 2020 the carrying amount in US dollars had reduced to USD 120.9 million, due to the devaluation
of the EGP since March 2015.
Provision for indemnifications
As part of historical transactions, the Group has agreed with the transaction parties on certain
indemnities related to potential tax and legal exposures for both parties. Potential outflows of economic
resources related to these indemnities contain inherent uncertainties for which the Group engaged
renowned local and international law firms to examine OCI’s legal position. No information is provided on
the specific assumptions included in the estimate of outflows as it would prejudice the Group’s position
in these disputes.
Sorfert reinvestment case
The Large Multinationals Directorate of the Algerian Tax Authorities (DGE) issued to Sorfert a letter in
which its initial claim of DZD 7,296 million (USD 55.4 million) related to the alleged non-compliance
of the requirements for the tax exemption granted by the Agency Nationale de Developpement de
l’Investissement (ANDI) was maintained. The DGE is of the opinion that Sorfert did not timely carry out
the reinvestment obligations as required under ANDI exemption.
As a result, the DGE requires Sorfert to repay the full assumed tax benefit it enjoyed in relation herewith.
Sorfert is of the opinion that it has complied with its reinvestment obligations as well as that the basis
of any claim should in any case be limited to the source of income that is taxable (local sales only as
export sales are exempted under domestic Algerian tax law) and as such Sorfert recorded a provision of
USD 1.7 million. This position was examined by various reputable tax advisors who concurred with the
opinion of Sorfert.
22. Development of cost of sales and selling, general and administrative expenses
a. Expenses by nature
$ millions Note
2020 2019
Raw materials and consumables and finished goods
2,105.7
1,884.2Maintenance and repair
128.4
104.5Employee benefit expenses (22b)
364.5
279.4Depreciation and amortization (7)
592.2
544.7Consultancy expenses
33.1
28.6Other
57.4
86.6Total
3,281.3
2,928.0Cost of sales
3,062.0
2,708.9Selling, general and administrative expenses
219.3
219.1Total
3,281.3
2,928.0b. Employee benefit expenses
$ millions Note
2020 2019
Wages and salaries
244.7
188.9Social securities
7.8
8.1Employee incentive plans
34.1
31.7Pension cost
22.1
14.9Share-based compensation expenses (22c)
7.9
6.6Other employee expenses
47.9
29.2Total
364.5
279.4NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
15822. Development of cost of sales and selling, general and administrative expenses
(continued)
The increase in employee benefit expenses in 2020 compared to 2019 is mainly related to the full year
consolidation of Fertil.
During the financial year ended 31 December 2020, the number of key executives was 4 (2019: 3 key
executives), which represents the Executive Board members; Nassef Sawiris (Chief Executive Officer
from January 1st till August 1st; Executive Chair per August 1st), Hassan Badrawi (‘Chief Financial
Officer’) Maud de Vries (Chief Legal and Human Capital Officer) and Ahmed El-Hoshy (Chief Executive
Officer per August 1st). Ahmed El-Hoshy is considered as key management personnel for the full year
2020. During the financial year ended 31 December 2020, the number of staff employed in the Group
amounted to 3,682 employees (2019: 3,147 employees).
c. Share-based compensation arrangements
OCI has currently award agreements outstanding under four different share-based compensation plans.
In 2020 share based compensation Awards were granted under the existing Performance Share Unit
Plan and Restricted Stock Unit Plan.
Share option plans
In 2020 no share options were exercised and all outstanding share options expired per 31 December 2020.
Performance share plan
In 2014, a new performance share plan was introduced for the Executive Board. The share plan
comprises the conditional granting of shares in OCI. Each year a plan with a 3-year vesting period starts
in which the Company’s performance is measured based on total shareholder return (‘TSR’) against
a peer group of companies. The fair value of these awards has been calculated using Monte-Carlo
simulations. The number of conditional shares corresponds to a percentage (maximum of 150%) of the
fixed reference salary divided by the price of the share on the stock market on the first day of the vesting
period. The relative ranking that OCI achieves in the peer group determines the definitive number of
shares that are granted at the end of the vesting period. The remaining shares vested must be retained
by the members of the Executive Board for a period of 2 years.
In 2017, in total 190,600 conditional shares have been granted with a fair value of EUR 3.4 million (fair
value at grant date EUR 17.710 per share, using a volatility of 39.3%, a risk-free rate of (0.7) percent
and a dividend yield of 0.0%). At 30 September 2017, a total of 87,013 conditional shares were
vested at a TSR of 55.4% resulting in a total number of shares of 48,239 delivered. In 2020, a total of
103,587 conditional shares have been vested at a TSR of 77.0%, resulting in a total number of shares
of 79,762 delivered.
In 2018, in total 166,564 conditional shares have been granted with a fair value of EUR 3.4 million (fair
value at grant date EUR 20.770 per share, using a volatility of 37.5%, a risk-free rate of (0.589) percent
and a dividend yield of 0.0%).
Bonus matching plan
In 2014, a new bonus matching plan was introduced for the members of the Executive Board and
Senior Management. In this plan members of the Executive Board and Senior Management are entitled
to buy shares from their annual bonus. The shares will be withheld for a period of three years. After the
3-year period, the participants will receive a bonus share for each share of the plan. For the members of
the Executive Board, the shares vested must be retained for a period of 2 years.
In 2017, 95,060 bonus matching rights were granted in the bonus matching plan with a fair value of
EUR 1.6 million (with a fair value of EUR 16.59 at grant date equal of the share price at grant date
calculated with a dividend yield of 0.0%). In September 2017, 14,496 shares were vested giving a total
outstanding at 31 December 2017 of 80,564 bonus matching rights. In 2020, 80,564 shares were
vested, resulting in no remaining shares outstanding.
In 2018, 93,451 bonus matching rights were granted in the bonus matching plan with a fair value of
EUR 1.7 million (with a fair value of EUR 18.085 at grant date equal of the share price at grant date
calculated with a dividend yield of 0.0%). At 31 December 2020, all shares were outstanding to be
vested at their vesting date.
In 2019 it was decided to discontinue the Bonus Matching Plan for all eligible employees. Current
matching rights will continue to vest at their normal vesting date, but no new awards will be made after
those made in 2018.
Performance share units plan
In 2019, a new performance share unit plan was introduced for the Executive Board as replacement
for the performance share plan. The performance share unit plan comprises the conditional granting of
shares in OCI. Each year a plan with a 3-year vesting period starts in which the Company’s performance
is measured based on total shareholder return (‘TSR’) against a peer group of companies operating
in a similar or the same market. Between 0% and 150% of this award will vest at the end of 3-year
performance period based on the actual performance. The fair value of these awards has been
calculated using a Monte-Carlo simulations model. The number of performance stock units comprising
Shares has been calculated based on the average OCI N.V. closing sales price of the Shares as quoted
in Euronext Amsterdam on the date of the grant.
The relative ranking that OCI achieves in the peer group determines the definitive number of shares
that are granted at the end of the vesting period. The remaining shares vested must be retained by the
members of the Executive Board for a period of 2 years.
In 2019, in total 230,558 conditional shares have been granted with a fair value of EUR 3.6 million (fair
value at grant date EUR 19.46 per share, using a volatility of 34.7%, risk-free rate of (-0.659) percent
and expected dividend yield of 0.0%).
In 2020, in total 316,729 conditional shares have been granted with a fair market value of EUR 4.3
million (fair value at grant date EUR 13.69 per share), using a volatility of 34.5%, risk-free rate of (-0.66)
percent and expected dividend yield of 0.0%).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
15922. Development of cost of sales and selling, general and administrative expenses
(continued)
Restricted stock units plan
For the level below the Board, a restricted stock unit plan was implemented to replace the Bonus
Matching Plan. First awards granted under this plan was made in 2019. Executive Directors are not
eligible for RSU grants. The restricted stock unit plan comprises the conditional granting of shares in
OCI. The total gross entitlement of an eligible employee under the applicable short-term incentive plan
will be paid out partly in cash in accordance with the short-term incentive plan and partly in awards
in accordance with this RSU plan. Shares will vest for 1/3 of the restricted stock units comprising the
award at the second anniversary of the date of grant and for 2/3 of the restricted stock units comprising
the award on the third anniversary of the date of grant subject to still being employed by OCI. The RSU
entitles the participants to dividend equivalents. The restricted stock unit plan comprises the conditional
granting of shares in OCI.
In 2019, in total 206,253 conditional shares have been granted with a fair value of EUR 5.5 million
(fair value at grant date of EUR 26,45 per share equals the share price at grant date calculated with a
dividend yield of 0.0%).
In 2020, in total 89,900 conditional shares have been granted with a fair value of EUR 0.95 million
(fair value at grant date of EUR 10.52 per share equals the share price at grant date calculated with a
dividend yield of 0.0%).
The fair value of the RSUs awarded is based on OCI’s share price at the grant date. Furthermore, when
measuring the fair value of RSU share awards, there may be an adjustment for any expected dividends.
In this case, there will be no adjustment for dividends since the participants are entitled to dividend
equivalents during the vesting period.
23. Other income
$ millions
2020 2019
Insurance proceeds
3.7
3.3Fertiglobe business combination
13.3
-Other
0.6
2.5Total
17.6
5.8Insurance proceeds in 2020 of USD 3.7 million relate to BioMCN. For the Fertiglobe business
combination reference is made to note 2.2.1.
24. Other expenses
$ millions Note
2020 2019
Loss on sale of scrapped assets
-
0.9Other 21
23.4
3.6Total
23.4
4.5For the other expense related to the provision for indemnifications, reference is made to note 21.
25. Net finance cost
$ millions
2020 2019
Interest income on loans and receivables
4.4
5.9Foreign exchange gain
208.1
54.9Finance income
212.5
60.8Interest expense and other financing costs on financial liabilities measured
at amortized cost
(307.5)
(311.8)Foreign exchange loss
(104.9)
(75.9)Finance cost
(412.4)
(387.7)Net finance cost recognized in profit or loss
(199.9)
(326.9)The foreign exchange gains and losses mainly relate to external financing, FX derivatives and to the
revaluation of intercompany balances in foreign currencies (for which the statement of profit or loss
impact is not eliminated in the consolidated financial statements). In 2020, the Company recorded a
gain of USD 45.6 million resulting from a settlement of its FX derivatives. Included in the interest expense
and other financing costs on financial liabilities measured at amortized cost is a call premium of USD
33.3 million (2019: USD 6.3 million) related to early redemption of bonds.
For the interest expense related to lease obligations reference is made to note 19.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
16026. Earnings per share
2020 2019
i. Basic
Net (loss) attributable to shareholders
(177.7)
(334.7)Weighted average number of ordinary share (Basic)
209,709,296
209,461,639Basic earnings per ordinary share
(0.847)
(1.598)ii. Diluted
Net (Loss) attributable to holders of ordinary shareholders
(177.7)
(334.7)Weighted average number of ordinary shares (Basic)
209,709,296
209,461,639Adjustment for assumed equity-settled share-based compensation
anti-dilutive
anti-dilutiveDiluted earnings per ordinary share
(0.847)
(1.598)Weighted average number of ordinary shares calculation
shares
2020 2019
Issued ordinary shares at 1 January
210,306,101
210,306,101Effect of treasury shares held
(596,805)
(844,462)Weighted average number of ordinary shares outstanding as per
31 December
209,709,296
209,461,639
27. Segment reporting
OCI’s reportable segments are consistent with how the Chief Operating Decision Maker (‘CODM‘)
manages the business operations and views the markets it serves. The reportable segments are:
Methanol US, Methanol Europe, Nitrogen US, Nitrogen Europe and Fertiglobe. The organizational
structure of the segments is based on a number of factors that the CODM uses to evaluate, view, and
direct business operations.
Segment policy
The Company derives the results of the business segments directly from its internal management
reporting system. All segments are managed separately because they require different operating
strategies and use their own assets and employees. The entities grouped together in each segment
have similar regulatory environments, macroeconomic conditions, banking, insurance and public utilities.
The Group has two revenue streams from contracts with customers that relate to the sale of goods,
namely, Nitrogen and Methanol.
Segment revenues includes revenues from sales to external customers and intersegment revenues.
EBITDA, Adjusted EBITDA and Profit / (loss) are the primary performance measure used by our CODM
to evaluate operating results and allocate capital resources among segments. These are also the
profitability measures used to set management and executive incentive compensation goals. ‘Other’
consists of share-based compensation and certain corporate general and administrative expenses
that are not allocated to the segments. Segment results, assets and liabilities include items directly
attributable to a segment as well as those that can be reasonably and consistently re-allocated.
A summary description of each reportable segment is as follows:
Methanol US
This segment consists of OCI Beaumont (OCIB), Natgasoline LLC and the trading entities: OCI Methanol
and Marketing LLC (OMM US).
OCI Beaumont is an integrated methanol and ammonia production facility that is strategically located on
the Texas Gulf Coast near Beaumont. Natgasoline LLC is a world scale methanol production complex in
Beaumont, Texas. OCI and its partner, Consolidated Energy Limited (CEL)/G2X, each own 50% stakes.
Natgasoline LLC is an equity-accounted investee of the Group, reference is made to note 10.
Natgasoline commenced production in 2018 and due to the similarities in regulatory environment,
products and customer base, this equity accounted investee has been included in the ‘Methanol US’
segment as of 2018 on a proportionally consolidated basis. The elimination column is used to eliminate
the proportionally consolidated figures of Natgasoline that are included in the US Methanol segment
and to include the investment in, and results from Natgasoline (associate) and thereby reconcile to the
Group’s reported figures.
OCIB and Natgasoline sell mainly domestically; primarily to industrial customers in and around the U.S.
Gulf Coast through pipeline connections to adjacent customers, port access with dedicated methanol
and ammonia import / export jetties, and truck loading facilities for both methanol and ammonia. OMM
US is a trading entity that sells products produced by OCIB and Natgasoline.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
16127. Segment reporting
(continued)
Methanol Europe
This segment consists of BioMCN, located at Delfzijl in the Netherlands, OCI Fuels Ltd, OCI Fuels B.V.
and OCI Methanol Marketing B.V. (OMM EU). BioMCN is one of Europe’s largest methanol producers.
BioMCN produces two types of methanol: bio-methanol and regular (also known as grey) methanol.
OCI Fuels is a trading entity that supplies biogas, which is processed into bio-methanol and bio-fuel,
and sells the bio-methanol products produced by BioMCN. OMM EU is a trading entity that sells grey
methanol products produced by BioMCN.
Nitrogen US
This segment consists of Iowa Fertilizer Company (IFCo), a wholly owned nitrogen fertilizer complex in
Iowa and the trading entity, N-7. IFCo products are sold via the trading entity.
Nitrogen Europe
This segment consists of OCI Nitrogen. OCI Nitrogen is Europe’s second largest integrated nitrates
fertilizer producer and the world’s largest melamine producer with production site in Geleen, the
Netherlands.
Fertiglobe (previously Nitrogen MENA)
During 2019 OCI and ADNOC completed a transaction to combine ADNOC’s fertilizer business
into OCI’s Middle East and North Africa (MENA) nitrogen fertilizer platform, creating Fertiglobe. The
Fertiglobe segment consists of the following entities: Egyptian Fertilizer Company (EFC), Egypt Basic
Industries Corporation (EBIC), Sorfert, Fertil, Fertiglobe Distribution (FD), OCI Fertilizer Trading (OFT), OCI
Fertilizer Trade and Supply (OFTS) and OCI S.A.E. EFC is a granular urea producer in Egypt. EBIC is an
ammonia plant in Egypt. Sorfert is a partnership with Algeria’s state-owned oil and gas authority and is
one of the largest nitrogen fertilizer producers in North Africa. Fertil is a producer of urea fertilizer in Abu
Dhabi. FD, OFT and OFTS are trading entities based in Abu Dhabi, Dubai and the Netherlands.
Other
This segment consists of all remaining entities of the Group.
2020
$ millions
Methanol
US
1
Methanol
Europe
Nitrogen
US
Nitrogen
Europe Fertiglobe Other Eliminations Total
Total revenues
465.7 339.1 547.9 752.9 1,550.8 1.3 (183.6) 3,474.1
EBITDA
2
148.2 23.0 181.0 125.1 437.5 (54.2) (81.4) 779.2
Adjusted EBITDA
2
135.6 21.6 181.0 132.3 441.0 (39.4) (2.3) 869.8
Income from equity-
accounted investees
- - - 2.3 - - (39.0) (36.7)
Depreciation and
amortization
(153.1) (28.5) (142.7) (82.9) (268.0) (3.8) 86.8 (592.2)
Finance income
0.6 0.1 0.3 7.2 33.6 280.3 (109.6) 212.5
Finance expense
(34.0) (4.4) (128.6) (9.9) (87.0) (289.5) 141.0 (412.4)
Income tax
(expense) / income
1.4 0.8 (0.1) (13.4) (40.9) 7.7 - (44.5)
Net profit / (loss)
(36.9) (9.0) (90.1) 28.4 75.2 (59.6) (2.1) (94.1)
Equity-accounted
investees
- - - 15.6 - 0.2 452.9 468.7
Capital expenditures
PP&E
56.5 38.1 9.8 92.0 66.4 0.7 (10.7) 252.8
Total assets
1,605.7 436.6 2,192.4 743.9 4,616.3 102.0 (599.9) 9,097.0
1
Including ammonia at OCIB
2
OCI N.V. uses Alternative Performance Measures (‘APM’) to provide a better understanding of the
underlying developments of the performance of the business. The APMs are not defined in IFRS and
should be used as supplementary information in conjunction with the most directly comparable IFRS
measures. The definition of the APM and a detailed reconciliation between the APM and the most
directly comparable IFRS measure can be found on pages 197-198 of this report.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
16227. Segment reporting
(continued)
2019
$ millions
Methanol
US
1
Methanol
Europe
Nitrogen
US
Nitrogen
Europe Fertiglobe Other Eliminations Total
Total revenues 512.1 280.1 541.0 812.1 1,055.5 - (169.1) 3,031.7
EBITDA
2
72.2 (6.3) 219.5 150.5 369.8 (107.7) (48.3) 649.7
Adjusted EBITDA
2
91.8 (4.9) 219.5 152.4 374.3 (84.7) - 748.4
Income from equity-
accounted investees
1.4 - - 2.6 - (0.1) (60.5) (56.6)
Depreciation and
amortization
(151.6) (14.6) (152.7) (71.3) (222.6) (4.4) 72.5 (544.7)
Finance income 0.9 - 1.1 4.1 15.1 157.2 (117.6) 60.8
Finance expense (69.3) (1.2) (117.5) (7.2) (151.2) (195.2) 153.9 (387.7)
Income tax
(expense) / income
(0.1) (24.4) (0.5) (16.6) (15.1) 34.8 - (21.7)
Net profit / (loss) (146.3) (46.5) (50.1) 62.1 (4.0) (115.4) - (300.2)
Equity-accounted
investees
- - - 14.4 - 0.7 491.8 506.9
Capital expenditures
PP&E
57.6 66.6 36.7 80.9 50.6 0.8 (5.0) 288.2
Total assets 1,627.2 369.2 2,269.0 675.1 4,859.5 248.0 (628.4) 9,419.6
1
Including ammonia at OCIB
2
OCI N.V. uses Alternative Performance Measures (‘APM’) to provide a better understanding of the
underlying developments of the performance of the business. The APMs are not defined in IFRS and
should be used as supplementary information in conjunction with the most directly comparable IFRS
measures. The definition of the APM and a detailed reconciliation between the APM and the most
directly comparable IFRS measure can be found on pages 197-198 of this report.
Ltd. will be combined with OCI Fuels B.V. in the segment Methanol Europe. The comparative numbers
of 2019 are restated to reflect that change.
Geographical information of continuing operations
The geographic information below analyses the Group’s revenue (by destination of the goods) and non-
current assets (by the Company where the activities are being operated). OCI has no single customer
that represents 10 percent or more of revenues and therefore information about major customers is not
provided.
Revenue Non-current assets
$ millions
2020 2019 2020 2019
Europe
1,218.8
1,235.8878.3
775.2Americas
1,281.2
1,330.32,916.1
3,123.4Africa & Middle East
302.0
184.73,697.2
4,098.6Asia & Oceania
672.1
280.921.6
1.6Total
3,474.1
3,031.77,513.2
7,998.8The key performance obligation of the OCI group is always the supply of products as specified in the
contracts with customers, possible additional performance obligations included are transportation
and related cost of insurance, depending on the incoterms. The Group has two revenue streams
from contracts with customers that relate to the supply of products i.e. Nitrogen and Methanol. No
impairment losses on receivables have been recognized (reference is made to note 6.1 and note 9).
Based on the IFRS 15 accounting policies adopted, the following modifications to the contracts are
allowed: discounts and rebates. They are all taken into account when presenting the segment revenues.
Time value of money is not considered to be relevant for the amendment of the revenue amount,
as the payment terms are short. Also, there are no non-cash considerations that would need to be
disclosed separately. No information is provided about remaining performance obligations at current and
comparative year end date that have an original expected duration of one year or less, as allowed by
IFRS 15.
28. Contingencies
Contingent liabilities
Letters of guarantee / letters of credit
OCI has a guarantee facility with Rabobank for a maximum guarantee amount of USD 140.6 million
(EUR 115.0 million). Under this guarantee facility, USD 83.3 million (EUR 68.2 million) has been utilized.
The facility is used to issue guarantees on behalf of the subsidiaries, mainly for operational purposes.
OCI has an uncommitted surety facility with Tokio Marine Europe SA and Zürich Insurance PLC for a
maximum guarantee amount of USD 30.6 million (EUR 25.0 million). This facility is fully utilized. The
facility is used to issue a performance guarantee on behalf of OCI Nitrogen BV.
OCI also has an uncommitted facility for the issuance of payment undertakings with BNP Paribas for an
amount of USD 93.7 million, fully utilized.
Outstanding letters of credit as at 31 December 2020 (uncovered portion) amounted to nil.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
16328. Contingencies
(continued)
Litigations and claims
In the normal course of business, the Group entities and joint ventures are involved in some arbitration
or court cases as defendants or claimants. These litigations are carefully monitored by the entities’
management and legal counsels, and are regularly assessed with due consideration for possible
insurance coverage and recourse rights on third parties. OCI does not expect these proceedings to
result in liabilities that have a material effect on the Company’s financial position.
In cases where it is probable that the outcome of the proceedings will be unfavorable, and the financial
outcome can be measured reliably, a provision has been recognized in the financial statements which is
disclosed in note 21 ‘Provisions’. It should be understood that, in light of possible future developments,
such as (a) potential additional lawsuits, (b) possible future settlements, and (c) rulings or judgments in
pending lawsuits, certain cases may result in additional liabilities and related costs. At this point in time,
OCI cannot estimate any additional amount of loss or range of loss in excess of the recorded amounts
with sufficient certainty to allow such amount or range of amounts to be meaningful. Moreover, if and
to the extent that the contingent liabilities materialize, they are typically paid over a number of years
and the timing of such payments cannot be predicted with confidence. While the outcome of said
cases, claims and disputes cannot be predicted with certainty, we believe, based upon legal advice and
information received, that the final outcome will not materially affect our consolidated financial position
but could be material to our results of operations or cash flows in any one accounting period.
Sorfert legal case
On 5 March 2018, the lower criminal court of Oran (Tribunal du pôle pénal spécialisé d’Oran) issued a
judgment against Sorfert regarding an alleged violation of exchange control regulations as well as the
regulation of public markets and public service delegations. The lower court ordered Sorfert to pay a
fine in the amount of 5.5 billion Algerian dinars (about USD 42.1 million) and an officer of the company
received a fine of DZD 2.8 billion (about USD 21.1 million). On 7 March 2018, Sorfert lodged an
appeal with the Court of Appeal of Oran, Algeria who upheld the verdict against Sorfert in its judgment
rendered on 28 November 2018. In January 2019, Sorfert lodged an appeal against this judgment with
the Supreme Court. Sorfert disputes the validity of the judgment and continues to vigorously defend
its case. To date, no Supreme Court hearing has been scheduled and during the appeal period the
enforcement of the judgment is suspended. Various renowned local and international law firms have
examined OCI’s legal position. No provision has been recorded by the Group related to this matter.
EBIC free zone status
On 20 April 2013, the Administrative Court ruled in favor of EBIC for the reinstatement of EBIC to its
previous status as a free zone entity in Egypt. The General Authority for Investment and Free Zones
(‘GAFI’) filed an appeal before the Administrative Court. The Court has not yet rendered a decision. OCI
concluded to release the (deferred) tax liabilities totaling USD 138.2 million at 31 December 2015 and no
tax filings have been done by EBIC since the filing for the year 2011. On 4 January 2018, GAFI issued
an executive decision that allows for the enforcement of the Administrative Court’s judgment in favor of
EBIC and EBIC received the Free Zone Status tax card. EBIC’s free zone status will remain subject to
the outcome of the Appeal before the Administrative Court.
OCI S.A.E. tax dispute
In October 2012, the Egyptian Tax Authority (‘ETA’) raised a tax evasion claim against our Egyptian
subsidiary, Orascom Construction Industries S.A.E. (‘OCI S.A.E.’). The tax dispute related to the sale of
OCI S.A.E.’s cement business to Lafarge SA in 2007. This was filed against OCI S.A.E. despite there
being no official investigation. Although OCI S.A.E. and its legal and tax advisors believed that the
aforementioned transaction was exempted of tax, management entered into a settlement agreement
whereby EGP 7.1 billion would be paid over a 5-year period.
The agreement was followed by payment of a first installment of EGP 2.5 billion in 2013. Following
the change in government, the company was exonerated from the tax claim by the Egyptian Public
Prosecutor on 18 February 2014 and subsequently by the ETA’s Independent Appeals Committee on 4
November 2014. The ETA appealed this decision without including new facts or documents. The appeal
is ongoing. OCI S.A.E. and its local counsel believe the likelihood of a judgment in favor of the ETA is
not probable. On 13 November 2014 OCI S.A.E. announced that it would transfer its rights to EGP
1.9 billion undue paid tax amounts to the Tahya Misr Fund and recorded a provision for this amount,
reference is made to note 21 Provisions.
Despite the ETA Independent Appeals Committee ruling in favor of OCI S.A.E., OCI S.A.E. was still held
to pay EGP 900 million. OCI S.A.E. has lodged a reimbursement claim for this amount. As this dispute
occurred prior to the demerger of the Engineering and Construction Group that formed Orascom
Construction PLC (‘OC’) in 2015, any liabilities and any recoveries are shared on a 50:50 basis between
OCI N.V. and OC. Should the ETA win their appeal, OCI N.V.’s maximum share of the tax claim would be
EGP 2.3 billion, which equates to approximately USD 146.0 million.
Asset retirement obligations
Sorfert has a contractual asset retirement obligation in connection with the lease of its land. This asset
retirement obligation is being disclosed as a contingent liability because it is not possible to determine a
reliable estimate in both timing and value of this obligation.
OCI Nitrogen entered into agreements with DSM and associated company Sitech for respectively
the lease of the sites (land) on which it operates its plant and site services/usage. These agreements
have an indefinite term and include an asset dismantling obligation and the obligation to clean up
environmental pollution occurred after zero measurement. These obligations have not been accounted
for, since the company has no plans to end its business activities in the foreseeable future as such the
financial impact is assessed as not material by the company’s management.
Fertil entered into an agreement with ADNOC for the lease of the land on which it operates its plant.
The agreement has an indefinite term and includes an asset dismantling obligation and the obligation
to clean up environmental pollution occurred after decommissioning. This obligation has not been
accounted for, since the company has no plans to end its business activities in the foreseeable future as
such the financial impact is assessed as not material by the company’s management.
Contingent assets
A sequence of historical transactions resulted in (gross) deductible temporary tax differences of USD 1.4
billion. However, due to a difference in interpretation of local tax regulations, the deductible temporary
differences do currently not yet meet the recognition criteria of IAS 12/ IFRIC 23. The group company
concerned is currently under examination of the tax authorities in the respective jurisdiction. A definitive
conclusion on the treatment is not expected within a short timeframe.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
16429. Commitments
29.1 Biogas purchase agreements
OCI enters into biogas purchase agreements around the USA for the production of bio-methanol in the
methanol plant in Beaumont (Texas, USA) and for sale to the USA transportation market. Through these
long-term agreements OCI purchases biogas for a fixed price. Per 31 December 2020, an expected
13.0 million mmbtu biogas will be purchased over the coming years (2021 - 2026). The total expected
purchase commitment per 31 December 2020 amounts to USD 158.2 million. Total contract value is
21.6 million mmbtu and the total contract value is USD 260.1 million.
29.2 Capital commitments
Capital commitments relate to purchase commitments of property, plant and equipment.
$ millions
2020 2019
OCI Beaumont
-
15.3Sorfert
19.9
32.7Fertil
8.5
8.9BioMCN
7.6
13.7OCI Nitrogen
7.9
21.9EFC
1.3
3.5IFCo
4.6
1.8Total
49.8
97.830. Related party transactions
Transactions with related parties – normal course of business
Transactions with related parties occur when a relationship exists between the Company and their
directors and key management personnel. The Company engages in two types of related party
transactions:
• Those with NNS Luxembourg Sarl for occasional consultancy services and the Executive Chair’s
travel as per his right to expense the use of a private aircraft for OCI-related business travel; and
• The Company’s former construction arm which was divested on 7 March 2015 and incorporated as a
separate legal entity in the United Arab Emirates. The Sawiris Family, the majority shareholders of OCI,
also owns the majority of the outstanding shares of OC, which qualifies OC and its subsidiaries to be
classified as related parties.
OCI has ongoing construction contracts with OC Group. The transactions with the following entities of
the OC Group are presented in the financial statements as related party transactions:
• Orascom Construction PLC (‘OC’)
• OCI Construction Holding Cyprus
• Orascom E&C (‘OEC’)
• Contrack International Inc. (‘Contrack’)
• Orascom Construction Egypt
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
16530. Related party transactions
(continued)
The following is a list of significant related party transactions and outstanding amounts as at
31 December 2020:
Related party
Relation
Revenue
transactions
during the
year
AR
outstanding
at year end
Purchase
transactions
during the
year
AP
outstanding
at year end
Loans
receivable
Interest
income
Orascom Construction Egypt OC group
company
- - - 0.9 - -
OCI Construction Holding
Cyprus
OC group
company
- - - 0.8 - -
Orascom Construction PLC OC group
company
- - - 0.2 - -
NNS Luxembourg Sarl Related via
shareholder
0.2 0.2
Nassef Sawiris Executive
Chair
- - 0.7 0.2 - -
Total
- - 0.9 2.3 - -
The following is a list of significant related party transactions and outstanding amounts as at
31 December 2019:
Related party
Relation
Revenue
transactions
during the
year
AR
outstanding
at year end
Purchase
transactions
during the
year
AP
outstanding
at year end
Loans
receivable
Interest
income
Orascom Construction Egypt OC group
company
- - - 0.3 - -
Contrack International OC group
company
- - 0.1 0.5 - -
OCI Construction Holding
Cyprus
OC group
company
- - - 0.8 - -
Orascom Construction PLC OC group
company
- 0.2 - - - -
NNS Luxembourg Sarl Related via
shareholder
- - 0.2 7.1 - -
Nassef Sawiris CEO - - 1.0 0.2 - -
Total - 0.2 1.3 8.9 - -
Transactions with associates and joint ventures
OCI conducts transactions with its associates and joint ventures (as defined in note 3.2, together
“Equity-accounted investees”) in the ordinary course of business by buying and selling goods and
services from and to various Equity-accounted investees within the group.
These associates and joint ventures are:
• Firewater LLC
• Natgasoline LLC
• Fitco OCI Agro S.A.
• Shanxi Fenghe Melamine Company Ltd.
• Nitrogen Iberian Company SL
• Sitech Manufacturing Services C.V.
• Sitech Utility Holding Beheer B.V
• Sitech Utility Holding C.V.
• Sitech Services B.V.
• Utility Support Group B.V.
The following is a list of significant related party transactions and outstanding amounts as at
31 December 2020:
Related party
Relation
Revenue
transactions
during the year
AR outstanding
at year end
Purchase
transactions
during the year
AP outstanding
at year end
Loans
receivable
Interest income
Natgasoline LLC Related via
an associate
6.4 - 130.8 20.8 - -
Sitech Manufacturing
Services C.V.
Associate
- 0.3 138.4 52.0 - -
Utility Support Group B.V. Related via
an associate
13.3 1.2 53.3 4.5 56.8 1.8
Sitech Services B.V. Associate
- - 17.4 2.2 - -
OCI Nitrogen Iberian
Company
Joint venture
17.8 - - - - -
Shanxi Fenghe
Melamine Co Ltd.
Joint venture
0.5 0.1 15.1 - - -
Total
38.0 1.6 355.0 79.5 56.8 1.8
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
16630. Related party transactions
(continued)
The following is a list of significant related party transactions and outstanding amounts as at
31 December 2019:
Related party
Relation
Revenue
transactions
during the year
AR outstanding
at year end
Purchase
transactions
during the year
AP outstanding
at year end
Loans
receivable
Interest income
Natgasoline LLC Related via
an associate
6.7 0.2 143.7 34.9 - -
Sitech Manufacturing
Services C.V.
Associate - - 123.9 29.3 - -
Utility Support Group B.V. Related via
an associate
17.0 3.1 64.1 8.2 52.1 1.8
Sitech Services B.V. Associate - - 16.6 2.6 - -
OCI Nitrogen Iberian
Company
Joint venture 13.4 - - 1.1 - -
Shanxi Fenghe
Melamine Co Ltd.
Joint venture - 0.1 20.6 - - -
Total 37.1 3.4 368.9 76.1 52.1 1.8
Transactions and balances with equity-accounted investees and related parties
As these are transactions with Equity-accounted investees and related parties, the terms and conditions
may not necessarily be the same as transactions negotiated between third parties. Management
believes that the terms and conditions of all transactions with our Equity-accounted investees and
related parties are generally no less favorable to either party than those that could have been negotiated
with unaffiliated parties with respect to similar services.
The loan receivable balance from Utility Support Group consists of 2 loans:
• A Credit Facility of EUR 44.0 million that bears interest at a rate of 6 month Euribor + 3% (floor of
3.5% all in rate) and is repayable on 30 September 2021.
• A Loan of EUR 2.4 million that bears interest at a rate of 12 month Euribor + 1.7% (no floor) and is
repayable on 30 September 2021.
31. Remuneration of the Board of Directors (key management personnel)
We considered the members of the Board of Directors (Executive and Non-executive) to be the key
management personnel as defined in IAS 24 ‘Related parties’. For transactions with key management
personnel reference is made to note 30. No other benefits or remuneration were provided to or have
been entered into with above mentioned key management personnel except as disclosed below.
Remuneration of the Directors
During the financial year ended 31 December 2020, the total remuneration costs relating to the
Executive Directors amounted to USD 11.9 million (2019: USD 8.9 million) consisting of the elements
listed in the table below:
2020
Age Base salary
1
Annual bonus
Share-based
compensation
Total
remuneration
1
N. Sawiris
59 1,583,334 - 2,393,191 3,976,525
H. Badrawi
44 1,150,000 878,715 1,193,956 3,222,671
M. de Vries
48 526,667 402,426 356,049 1,285,142
A. El-Hoshy
36 1,091,667 921,032 1,420,277 3,432,976
Total
4,351,668 2,202,173 5,363,473 11,917,314
1
2019
Age Base salary
1
Annual bonus
Share-based
compensation
Total
remuneration
1
N. Sawiris 58 2,000,000 1,200,000 2,641,951 5,841,951
H. Badrawi 43 1,150,000 552,000 863,471 2,565,471
M. de Vries 47 280,000
2
134,400 108,060 552,460
Total 3,430,000 1,886,400 3,613,482 8,929,882
1
applicable.
2
With effect from 1 June 2019.
As at 31 December 2020, the Executive Directors held no stock options (2019: 35,000). The 35,000
stock options outstanding expired during 2020.
Mr. Badrawi participated in this plan before he was appointed as a board member for OCI N.V.
Outstanding
year end
2019 Granted Exercised Expired
Outstanding
year end
2020
Exercise
price Expiration
H. Badrawi 35,000
- - 35,000 - - 31-12-2020
Total 35,000
- - 35,000 - - -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
16731. Remuneration of the Board of Directors (key management personnel)
(continued)
At 31 December 2020, the Executive Directors held
713,851 conditional performance shares
(2019: 411,478 excluding the conditional performance shares granted to A. El-Hoshy prior to his
appointment to the Board).
Outstanding
year end
2019
Granted
conditional Vested
Less / more
due to TSR
Outstanding
year end
2020 Vesting date
N. Sawiris 103,587
- (79,762) (23,825) - 25-02-2020
84,873
- - - 84,873 25-02-2021
116,002
- - - 116,002 07-02-2022
-
135,354 - - 135,354 07-02-2023
N. Sawiris total 304,462
135,354 (79,762) (23,825) 336,229
H. Badrawi 40,315
- - - 40,315 25-02-2021
66,701
- - - 66,701 07-02-2022
-
77,829 - - 77,829 07-02-2023
H. Badrawi total 107,016
77,829 - - 184,845
M. de Vries -
32,485 - - 32,485 07-02-2023
M. de Vries total -
32,485 - - 32,485
A. El-Hoshy 41,376
1
- - - 41,376 25-02-2021
47,855
1
- - - 47,855 07-02-2022
-
71,061 - - 71,061 07-02-2023
A. El-Hoshy total 89,231
1
71,061 - - 160,292
Total 500,709
316,729 (79,762) (23,825) 713,851
1
These conditional performance shares were granted before appointment to the Board.
As at 31 December 2020, the Executive Directors held 38,196 bonus matching shares (2019: 53,834,
excluding the bonus matching shares granted to A. El-Hoshy prior to his appointment to the Board).
Outstanding
year end 2019
Granted Vested
Outstanding
year end
2020 Vesting date
N. Sawiris 21,571
- (21,571) - 11-05-2020
1
17,190
- - 17,190 09-04-2021
N Sawiris total 38,761
- (21,571) 17,190
H. Badrawi 7,500
2
- (7,500) - 14-04-2020
1,398
- - 1,398 09-04-2021
H. Badrawi total 8,898
- (7,500) 1,398
M. de Vries 1,200
2
- (1,200) - 14-04-2020
4,975
2
- - 4,975 09-04-2021
M. de Vries total 6,175
2
- (1,200) 4,975
A. El-Hoshy 12,719
2
- (12,719) - 14-04-2020
14,633
2
- - 14,633 09-04-2021
A. El-Hoshy total 27,352
2
- (12,719) 14,633
Total 81,186
- (42,990) 38,196
1
The Matching rights granted to N. Sawiris could not vest on 14 April 2020, as OCI was in a Closed
Trading Period (share based transactions related to the 2017 Bonus Matching Plan were not allowed
during this period under the Insider Trading / Market Abuse Regulations). Accordingly, the 2017
Matching Award vested on 11 May 2020 (the first trading day after the Closed Trading Period).
2
These bonus matching shares outstanding were granted before appointment to the Board.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
16831. Remuneration of the Board of Directors (key management personnel)
(continued)
As at 31 December 2020, the Executive Directors held 61,081 RSU shares (2019: 14,263 excluding
RSU shares granted to A. El-Hoshy prior to his appointment to the Board).
Outstanding
year end
2019 Granted Vested
Outstanding
year end
2020 Vesting date
M. de Vries 4,754
- - 4,754 17-04-2021
9,509
- - 9,509 17-04-2022
M. de Vries total 14,263
- - 14,263
A. El-Hoshy 9,115
- - 9,115 17-04-2021
18,231
- - 18,231 17-04-2022
-
6,491 - 6,491 07-02-2022
-
12,981 - 12,981 07-02-2023
A. El-Hoshy total 27,346
19,472 - 46,818
Total 41,609
19,472 - 61,081
In 2020, the total remuneration costs relating to the Non-Executive Directors amounted to USD 1.7
million
(2019: USD 1.5 million) consisting of the elements in the table below:
2020
Annual fixed
fee
Audit
committee
membership
Additional
fee
Nomination
governance
and
remuneration
committee
Health
safety
environment
committee Total
M. Bennett
300,000 - - 7,500 - 307,500
J. Ter Wisch
1
69,643 9,286 - 3,482 - 82,411
S. Schat
150,000 20,000 - 20,000 - 190,000
A. Montijn-
Groenewoud
150,000 - - 7,500 10,000 167,500
R.J. van de Kraats
150,000 25,000 - 7,500 - 182,500
G. Heckman
150,000 - - - 7,500 157,500
J. Guiraud
150,000 20,000 - 7,500 - 177,500
D. Welch
150,000 - 90,000 - 7,500 247,500
D. Fraser
150,000 20,000 - - - 170,000
H. van de Kerkhof
2
29,348 - - - 1,467 30,815
Total
1,448,991 94,286 90,000 53,482 26,467 1,713,226
1
Appointment ended on 17 June 2020.
2
Appointed on 20 October 2020.
2019
Annual fixed
fee
Audit
committee
membership
Additional
fee
Nomination
governance
and
remuneration
committee
Health
safety
environment
committee Total
M. Bennett 290,000 - - 7,500 3,750 301,250
J. Ter Wisch 145,000 20,000 - 7,500 - 172,500
S. Schat 145,000 20,000 - 17,500 - 182,500
A. Montijn-
Groenewoud
145,000 - - - 8,750 153,750
R.J. van de Kraats 145,000 25,000 - 7,500 - 177,500
G. Heckman 145,000 - - - 8,750 153,750
J. Guiraud 145,000 20,000 - 7,500 - 172,500
D. Welch
1
88,710 - - - 3,750 92,460
D. Fraser
1
88,710 10,000 - - - 98,710
Total 1,337,420 95,000 - 47,500 25,000 1,504,920
1
32. Subsequent events
Iowa Fertilizer Company redemption of bonds
On February 2, 2021 Iowa Fertilizer Company redeemed the outstanding principal amount of the
5.875% of USD 147.2 million. This transaction resulted in additional recurring cash interest savings and
marks the continuation of the company’s financial policy to optimize its capital structure.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Consolidated Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability OCI N.V.
Annual Report 2020
16933. External auditors’ fee
The service fees recognized in the financial statements 2020 for the service of KPMG amounted to USD
4.7 million (2019: USD 5.3 million). Other assurance services provided to the Group include services
related to bond offerings, voluntary audit of other financial statements, agreed upon procedures related
to covenant reporting and other statutory requirements.
The amounts per service category are shown in the following table:
Total service fee
of which KPMG Accountants N.V.
(The Netherlands)
$ millions
2020 2019 2020 2019
Audit of group financial statements
3.8
4.32.2
2.4Other assurance services
0.8
0.90.7
0.5Total assurance services
4.6
5.22.9
2.9Tax services
0.1
0.1-
-Sundry services
-
--
-Total
4.7
5.32.9
2.934. List of principal subsidiaries as per 31 December 2020
Companies Country
Percentage of
interest
Consolidation
method
Fertiglobe Holding UAE 58.00 Full
OCI Fuels B.V. The Netherlands 100.00 Full
OCI Methanol Marketing B.V. The Netherlands 100.00 Full
OCI Nitrogen B.V. The Netherlands 100.00 Full
BioMCN B.V. The Netherlands 100.00 Full
Iowa Fertilizer Company LLC United States 100.00 Full
OCI USA Inc. United States 100.00 Full
OCI Partners LP / OCI Beaumont United States 100.00 Full
N-7 LLC United States 50.00 Full
OCI Methanol Marketing LLC United States 100.00 Full
Key subsidiaries held via Fertiglobe
holding
Ruwais Fertilizers Industries Ltd (Fertil) UAE 100.00 Full
Egypt Basic Industries Corporation Egypt 60.00 Full
Egyptian Fertilizers Company Egypt 99.96 Full
Sorfert Algérie Spa Algeria 50.99 Full
Orascom Construction Industries S.A.E. Egypt 99.96 Full
Fertiglobe Distribution Limited UAE 100.00 Full
OCI Fertilizer Trade and Supply UAE 100.00 Full
OCI Fertilizer Trading Limited UAE 100.00 Full
A full list of affiliated companies will be available for public inspection at the Commercial Registry in
conformity with the provisions of Article 2:379 and 2:414 of the Dutch Civil Code.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER
CONTINUED
Financial
statements
171 Parent Company Statement
of Financial Position
172 Parent Company Statement
of Profit or Loss and other
Comprehensive Income
173 Parent Company Statement
of Changes in Equity
174 Parent Company Statement
of Cash Flows
175 Notes to the Parent
Company Financial
Statements
186 Other information
Parent Company
OCI N.V.
Annual Report 2020
170
OCI N.V.
Annual Report 2020
171Parent Company Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainabilityPARENT COMPANY STATEMENT OF FINANCIAL POSITION
AS AT
$ millions Note
31 December
2020
31 December
2019
Assets
Non-current assets
Investment in subsidiaries (41)
7,207.0
7,600.7Property, plant and equipment
0.8
0.4Right-of-use assets
0.8
1.2Financial assets at fair value through other comprehensive income (43)
2.9
3.4Other receivables (42)
881.8
881.8Deferred tax assets
0.0
4.8Total non-current assets
8,093.3
8,492.3Current assets
Other receivables (42)
128.6
51.2Cash and cash equivalents (44)
14.2
92.3Total current assets
142.8
143.5Total assets
8,236.1
8,635.8Equity
Share capital (45),(15)
5.6
5.6Share premium (15)
6,316.3
6,316.3Currency translation reserve
(1,242.2)
(1,692.0)Financial assets at fair value through other comprehensive income
(1.5)
(0.7)Other reserves
(117.0)
(120.8)Retained earnings
269.6
1,195.5Equity attributable to owners of the Company
5,230.8
5,703.9Liabilities
Non-current liabilities
Loans and borrowings (46)
2,660.7
2,622.4Lease obligations
0.2
0.6Trade and other payables (47)
-
-Deferred tax liabilities (53)
1.2
-Total non-current liabilities
2,662.1
2,623.0Current liabilities
Loans and borrowings (46)
277.2
112.1Lease obligations
0.6
0.6Trade and other payables (47)
65.4
196.2Income tax payables
-
-Total current liabilities
343.2
308.9Total liabilities
3,005.3
2,931.9Total equity and liabilities
8,236.1
8,635.8The notes on pages 175 to 185 are an integral part of these parent company financial statements.
OCI N.V.
Annual Report 2020
172Parent Company Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainabilityPARENT COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER
$ millions Note
2020 2019
Revenue from dividend income (48)
176.9
52.5Other income (50)
0.1
0.2General and administrative expenses (49)
(30.7)
(55.1)Other expenses
1
(51)
(1,030.1)
(543.7)Operating profit / (loss)
(883.8)
(546.1)Finance income (52)
235.1
80.3Finance cost (52)
(284.7)
(192.2)Net finance (cost)
(52)
(49.6)
(111.9)Profit / (loss) before income tax
(933.4)
(658.0)Income tax (53)
3.3
30.0Net profit / (loss)
(930.1)
(628.0)Other comprehensive income:
Items that are or may be reclassified subsequently to profit or loss
Currency translation differences
449.8
(122.4)Items that will not be reclassified to profit or loss
Changes in fair value of other financial assets
(0.8)
(0.2)Other comprehensive income, net of tax
449.0
(122.6)Total comprehensive income
(481.1)
(750.6)1
Other expenses in 2020 include an impairment of investment in subsidiaries of USD 1,008.6 million (2019: USD 504.8 million), reference is made to note 51.
The notes on pages 175 to 185 are an integral part of these parent company financial statements.
OCI N.V.
Annual Report 2020
173Parent Company Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainabilityPARENT COMPANY STATEMENT OF CHANGES IN EQUITY
$ millions Note
Share
capital
(15)
Share
premium
(15)
Financial assets
at fair value
through other
comprehensive
income
1
Currency
translation
2
Other
reserves
Retained
earnings
Equity
attributable
to owners
of the
Company
Balance at 1 January 2019
5.6 6,316.3 (0.5) (1,569.6) (127.2) 1,824.6 6,449.2
Net profit / (loss) (45.2) - - - - - (628.0) (628.0)
Other comprehensive income - - (0.2) (122.4) - - (122.6)
Total comprehensive income - - (0.2) (122.4) - (628.0) (750.6)
Treasury shares sold / delivered (16) - - - - 7.7 (7.7) -
Treasury shares acquired (16) - - - - (1.3) - (1.3)
Share-based payments (15) - - - - - 6.6 6.6
Balance at 31 December 2019 5.6 6,316.3 (0.7) (1,692.0) (120.8) 1,195.5 5,703.9
Net profit / (loss) (45.2)
- - - - - (930.1) (930.1)
Other comprehensive income
- - (0.8) 449.8 - - 449.0
Total comprehensive income
- - (0.8) 449.8 - (930.1) (481.1)
Treasury shares sold / delivered (16)
- - - - 3.8 (3.8) -
Treasury shares acquired (16)
-
- - - - - -
Share-based payments (15)
- - - - - 8.0 8.0
Balance at 31 December 2020
5.6 6,316.3 (1.5) (1,242.2) (117.0) 269.6 5,230.8
1
Cannot be reclassified to profit or loss
2
Legal reserve under Dutch Law.
The notes on pages 175 to 185 are an integral part of these parent company financial statements.
OCI N.V.
Annual Report 2020
174Parent Company Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainabilityPARENT COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER
$ millions Note
2020 2019
Net profit / (loss)
(930.1)
(628.0)
Adjustments for:
Depreciation (49)
0.8
0.7Interest income (52)
(65.8)
(41.3)Interest expense (52)
198.4
141.8Net foreign exchange loss (52)
(83.0)
11.5Dividend income from subsidiaries (48)
(176.9)
(52.5)Impairment of subsidiaries (41)
1,008.6
504.8Share-based compensation (15)
7.9
6.6Income tax expense (53)
(3.3)
(30.0)Changes in:
Other receivables (42)
(68.5)
(650.0)Trade and other payables (47)
(131.5)
116.5Cash flows:
Interest paid
(184.6)
(124.5)Interest paid Nile Holding loan
(7.1)
-Interest received
77.0
61.0Income taxes paid
-
(1.9)Income taxes received
1.1
-Dividends received
176.9
28.6Cash flow (used in) / from operating activities
(180.1)
(656.7)Capital contributions to subsidiaries (41)
-
-Cash flow (used in) investing activities
-
-Purchase of treasury shares (16)
-
(0.7)Proceeds from borrowings (18), (46)
1,675.0
1,631.3Proceeds from borrowings from subsidiaries (46)
145.9
68.0Repayment of borrowings (46)
(1,756.1)
(936.6)Repayment of borrowings from subsidiaries (46)
-
(6.2)Newly incurred transaction costs (46)
(10.4)
(17.2)Settlement of FX derivatives
45.6
-Payment of lease obligations
(0.6)
(0.6)Cash flow from financing activities
99.4
738.0Net (decrease) in cash and cash equivalents
(80.7)
81.3Cash and cash equivalents at 1 January
92.3
11.1Effect of exchange rate fluctuations on cash held
2.6
(0.1)Cash and cash equivalents at 31 December
14.2
92.3The notes on pages 175 to 185 are an integral part of these parent company financial statements.
OCI N.V.
Annual Report 2020
175Parent Company Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainabilityNOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
35. General
OCI N.V. (‘The Company’ or ‘OCI’) was established on 2 January 2013 as a public limited liability
company incorporated under Dutch law, with its head office located at Honthorststraat 19, Amsterdam,
the Netherlands. OCI is registered in the Dutch commercial register under no. 56821166 dated 2
January 2013. OCI is a holding company and is tax resident in the Netherlands.
36. Basis of preparation
The parent company financial statements have been prepared in accordance with International Financial
Reporting Standards as endorsed by the European Union (IFRS-EU).
The parent company financial statements have been prepared on the historical cost basis, except when
otherwise indicated.
The financial year of OCI commences on 1 January and ends on 31 December.
The Company’s functional currency is the Euro (‘EUR’). Because the Company’s major foreign
operations have the US dollar as their functional currency, the presentation currency of the Company is
the US dollar (‘USD’).
All values are rounded to the nearest tenth million (in millions of USD), except when stated otherwise.
The parent company financial statements have been authorized for issue by the Company’s Board of
Directors on 22
March 2021. The financial statements are subject to adoption of the Annual General
Meeting of Shareholders.
37. Accounting principles applied
In the parent company financial statements, the same accounting policies have been applied as set out
in the notes to the consolidated financial statements, except for the measurement of the subsidiaries
as presented under ‘Investments in subsidiaries’ in the parent company financial statements. These
policies have been consistently applied to all years presented.
For the amendments that became applicable and the new standards not yet applicable to OCI,
reference is made to note 4.2 of the consolidated financial statements.
38. Summary of significant accounting policies
Investments in subsidiaries
These policies have been consistently applied to all years presented.
In the parent company financial statements, investments in subsidiaries are recorded at cost less
impairment. In the parent company statement of profit or loss and other comprehensive income,
dividend received from investments in subsidiaries is recorded as dividend income.
Due to this application, the parent company equity and net result are not equal to the consolidated
equity and net result. A reconciliation for total equity attributable to owners of the company and total
comprehensive income is presented in note 45 to the parent company financial statements.
Dividend distribution
Dividend distribution to the Company’s shareholders is recognized as a liability in the parent company
financial statements, in the period in which the dividend is approved by the Company’s shareholders.
Dividend Income
Dividend income from the Company’s subsidiaries is recognized when the right to receive payment is
established.
39. Use of estimates and judgments
The preparation of the parent company financial statements requires management to exercise judgment
and make estimates and assumptions that affect the application of the Company’s accounting policies
and the reported amounts of assets, liabilities, income and expenses. Actual results could differ from
these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimates are revised and in any future periods
affected.
The areas involving a higher degree of judgment or complexity, or areas where assumptions and
estimates are significant to the parent company financial statements are the impairment of the
investments in subsidiaries.
Valuation of investments in subsidiaries
At each balance sheet date, the Company reviews whether there is an indication that its investments in
subsidiaries might be impaired.
An indication for impairment of the investments in subsidiaries may include, respectively, management’s
downward adjustment of the strategic plan. Further indications for impairments of its investments
may include other areas where observable data indicates that there is a measurable decrease in the
estimated future cash flows. These determinations require significant judgment. In making this judgment,
management evaluates, among other factors, the financial performance of and business outlook for its
investments, including factors such as industry and sector performance, changes in technology and
operational and financing cash flow.
OCI N.V.
Annual Report 2020
176Parent Company Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainabilityNOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
CONTINUED
39. Use of estimates and judgments
(continued)
If any indication for impairment exists, the recoverable amount of the investments is estimated in order
to determine the extent, if any, of the impairment loss. An investment is impaired if the recoverable
amount is lower than the carrying amount. The recoverable amount is defined as the higher of an
investment’s fair value less costs to sell and its value in use.
The investments’ fair value less costs to sell represents the best estimate of the amount OCI would
receive if it sold its investments.
The determination of the investment’s value in use is based on calculations using pre-tax cash flow
projections based on financial budgets approved by management covering a 5-year period and the
terminal value period.
If the recoverable amount of an investment is estimated to be less than its carrying amount, the carrying
amount of the investment is reduced to its recoverable amount. Any impairment loss is recognized
immediately in the statement of profit or loss.
Impairment losses recognized in prior periods shall be reversed only if there has been a change in the
estimates or external market information used to determine the investment’s recoverable amount since
the last impairment loss was recognized. The recoverable amount shall not exceed the carrying amount
that would have been determined had no impairment loss been recognized in prior years.
40. Financial risk and capital management
Reference is made to note 6 ‘Financial risk and capital management‘ in the notes to the consolidated
financial statements.
40.1 Credit risk
The maximum exposure to credit risk at the reporting date was as follows:
$ millions Note
2020 2019
Other receivables (42)
1,010.4
933.0Financial assets at fair value through other comprehensive income (43)
2.9
3.4Cash and cash equivalents (44)
14.2
92.3Total
1,027.5
1,028.7The maximum exposure to credit risk for other receivables by geographic region was as follows:
$ millions
2020 2019
Middle East and Africa
-
0.8Europe
43.3
31.6Americas
967.1
900.6Total
1,010.4
933.040.2 Liquidity risk
The following are the contractual maturities of financial liabilities, including estimated interest payments
and excluding the impact of netting agreements:
At 31 December 2020
$ millions
Note
Carrying
amount
Contractual
cash flow
Less than
1 year
Between 1
and
5 years
More than
5 years
Financial liabilities
Loans and borrowings (46)
2,660.7 3,140.1 106.6 3,033.5 -
Loans and borrowings from
subsidiaries
1
(46)
277.2 277.2 277.2 - -
Trade and other payables (47)
65.4 65.4 65.4 - -
Letters of guarantee (27)
- - - - -
Total
3,003.3 3,482.7 449.2 3,033.5 -
1
The contractual cash flows do not include interest cash flow for the loan received from OCI Overseas
Holding since this loan is repayable on demand.
At 31 December 2019
$ millions
Note
Carrying
amount
Contractual
cash flow
Less than
1 year
Between 1
and
5 years
More than
5 years
Financial liabilities
Loans and borrowings (46) 2,622.4 3,219.9 138.9 3,081.0 -
Loans and borrowings from
subsidiaries
1
(46) 112.1 112.1 112.1 - -
Trade and other payables (47) 196.2 196.2 196.2 - -
Letters of guarantee (27) - - - - -
Total 2,930.7 3,528.2 447.2 3,081.0 -
1
The contractual cash flows do not include interest cash flows for the loans received from OCI Overseas
Holding and OCI Nitrogen since these loans are repayable on demand.
OCI N.V. leases office space and vehicles. The office space lease is for an initial period of 7 years, with
an option to renew the lease thereafter. Lease payments are indexed annually.
Future minimum lease payments
$ millions
2020
Less than one year
0.6
Between one and five years
0.2
More than five years
-
Total
0.8
OCI N.V.
Annual Report 2020
177Parent Company Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability40. Financial risk and capital management
(continued)
As part of the preparation of the financial statements, the Company has assessed its liquidity risk.
Liquidity risk is the risk that the Company may encounter difficulty in meeting the obligations associated
with its financial liabilities that are settled by delivering cash or another financial asset. The Company has
made a number of assumptions in assessing its ability to meet its covenant requirements and satisfy
obligations as they become due. Determining these assumptions requires significant judgment about
future results and cash flows. Key assumptions include product pricing, gas pricing, utilization rates, and
the ability to arrange financing and obtain waivers for anticipated covenant breaches. Refer to note 6.2
and note 18 of the notes to the consolidated financial statements for the Company’s analyses of liquidity
risk and debt covenants, respectively. Furthermore, the Company’s financial liabilities include loans and
borrowings from subsidiaries. Although these loans and borrowings from subsidiaries are sometimes
classified as short-term due the contractual terms, the repayment date of these loans and borrowings
can be controlled and determined by OCI and may be extended beyond one year.
40.3 Market risk
Foreign exchange risk
As of 31 December 2020, if the US dollar had weakened / strengthened by 8 percent against the Euro
with all other variables held constant, the translation of foreign currency receivables, payables, cash and
cash equivalents and loans and borrowings would have resulted in an increase / decrease of USD 33.1
million of the profit of the year.
The summary of quantitative data about the Company’s exposure to foreign exchange transaction
exposure based on risk management policy for the main currencies was as follows:
At 31 December
$ millions
2020
USD
2019
USD
Other receivables
961.8
903.1Trade and other payables
(15.3)
(90.2)Loans and borrowings
(1,364.2)
(1,437.7)Cash and cash equivalents
3.9
11.1The following tables demonstrate the sensitivity to a reasonably possible change in EUR-USD exchange
rates, with all other variables held constant. The impact on the Company’s general and administrative
expenses is due to changes in the fair value of monetary assets and liabilities, including inter-company
positions. The Company’s exposure to foreign currency changes for all other currencies is not material.
2020
$ millions
Change in
FX rate
Effect on profit
before tax
Effect on
equity
EUR - USD
8 percent (33.1)
-(8) percent 33.1
-
2019
$ millions
Change in
FX rate
Effect on profit
before tax
Effect on
equity
EUR - USD 5 percent (30.7) -
(5) percent 30.7 -
Interest rate risk
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that
portion of borrowings affected. With all other variables held constant, the Company’s profit before tax
is affected through the impact on floating rate borrowings plus refinancing of fixed rate borrowings, as
follows:
$ millions In basis points
2020 2019
Effect on profit before tax for the coming year +100 bps
(3.5)
(1.6)- 100 bps
3.5
1.6Commodity price risk
Natural gas is one of the primary raw materials used in the OCI’s production processes. The Company
is exposed to natural gas price commodity risk for those entities that buy natural gas at spot prices.
Management monitors the development of gas prices and products’ selling prices on a daily basis using
external historical and forecast market data provided by several data vendors. Management analyzes
the potential profit margin per product based on these data in order to make operational and hedging
decisions.
The Company enters into gas hedges on behalf of subsidiaries, in order to hedge future gas price levels
over a certain period of time. The Company uses derivatives (Basis swaps, Index swaps and options)
in order to do so and does not apply hedge accounting on these instruments, therefore all fair value
changes related to these financial instruments are recognized in profit or loss.
OCI N.V. is a participating entity in several hedge strategies of the Group. For the hedge strategies
reference is made to note 6.3.
European Emission Allowance
Several subsidiaries of OCI N.V. receive European Emission Allowances (“EUAs”) as a result of their
industrial activities in the Netherlands. The EUAs are granted annually in advance by the Dutch Emission
Authority. The amount of EUAs granted is based on an estimate of CO2 emissions in the Netherlands
and the effective European emission legislation. In arrears, the subsidiaries have to refund allowances to
the Dutch Emission Authority based on actual CO2 emissions during the year. In the event that a deficit
in EUAs is identified, the subsidiaries have to purchase additional EUAs on the commodity markets to
settle its liability to the Dutch Emission Authority.
During the year, OCI N.V. has generated additional liquidity by selling its EUAs to the market. To manage
the price exposure on the liability towards the Dutch Emission Authority, OCI N.V. entered into financial
hedges to purchase EUAs. For further information reference is made to note 6.3.
For the fair value of the commodity derivatives reference is made to note 42.
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
CONTINUED
OCI N.V.
Annual Report 2020
178Parent Company Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability40. Financial risk and capital management
(continued)
Categories of financial instruments
2020
$ millions Note
Loans and
receivables /
payables at
amortized cost
Assets /
liabilities at fair
value
Financial asset
at fair value
through other
comprehensive
income
Assets
Other receivables (42)
1,000.2 10.2 -
Financial asset at fair value through other
comprehensive income (43)
- - 2.9
Cash and cash equivalents (44)
14.2 - -
Total
1,014.4 10.2 2.9
Liabilities
Loans and borrowings from third parties (46)
2,660.7 - -
Loans and borrowings from subsidiaries (46)
277.2 - -
Trade and other payables (47)
54.5 10.9 -
Total
2,992.4 10.9 -
2019
$ millions Note
Loans and
receivables /
payables at
amortized cost
Assets /
liabilities at fair
value
Financial asset
at fair value
through other
comprehensive
income
Assets
Other receivables (42) 933.0 - -
Financial asset at fair value through other
comprehensive income (43) - - 3.4
Cash and cash equivalents (44) 92.3 - -
Total 1,025.3 - 3.4
Liabilities
Loans and borrowings from third parties (46) 2,622.4 - -
Loans and borrowings from subsidiaries (46) 112.1 - -
Trade and other payables (47) 195.5 0.7 -
Total 2,930.0 0.7 -
The only financial instrument carried at fair value by the Company is the financial asset at fair value
through other comprehensive income which is measured with hierarchy level 1 of the fair value hierarchy
category.
41. Investment in subsidiaries
$ millions
2020 2019
Balance at 1 January
7,600.7
7,646.3Impairment
(1,008.6)
(504.8)Capital contribution
-
602.9Exchange rate differences
614.9
(143.7)Balance at 31 December
7,207.0
7,600.7Capital contributions
In 2019, capital contributions of USD 602.9 million were made to OCI Intermediate B.V. in kind by
settling loans and receivable balances.
Impairment testing 2020
An impairment trigger was identified in OCI N.V.’s investment in subsidiaries due to a decrease in share
price as per 31 December 2020 compared to 2019. As a result, the Group has prepared an impairment
test on the investment in subsidiaries in accordance with IAS 36. An impairment loss is recognized if the
carrying amount of an asset exceeds its estimated recoverable amount.
The recoverable amount has been estimated based on fair value less cost of disposal. Key elements
for the determination of fair value were the share price of OCI N.V. as per 31 December 2020 of USD
19.22 (which is measured with hierarchy level 1 of the fair value hierarchy category), the number of
outstanding shares of OCI NV (210,306,101 shares) and a control premium of 30% which is the median
bid premium for the acquisitions of Dutch listed companies in the period 2000 – 2019 based on the
price paid over and above the trading share price to obtain control and determined to be a reasonable
control premium for listed companies. The costs of disposal are assumed to be limited and included in
the control premium assumption. This results in a recoverable amount of USD 5,254.1 million.
The carrying amount of OCI Intermediate B.V. (which is the total of the investment in subsidiaries,
receivables from subsidiaries and the loans and borrowings) exceeded the recoverable value. As a
result, an impairment loss of USD 1,008.6 million is recognized in the Parent company statement of
Profit or Loss and Other Comprehensive Income.
List of subsidiaries as per 31 December 2020:
Name
Country of
incorporation Ownership %
OCI Intermediate B.V. The Netherlands 100.0
OCI UK Ltd. United Kingdom 100.0
OCI Intermediate B.V. is a holding company which has all operating companies as subsidiaries.
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
CONTINUED
OCI N.V.
Annual Report 2020
179Parent Company Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability42. Other receivables
$ millions
2020 2019
Receivables from subsidiaries
995.5
925.6Receivables from related parties
-
0.2Commodity derivatives
9.4
-Foreign currency derivatives
0.8
-Other receivables
4.7
7.2Total
1,010.4
933.0Non-current
881.8
881.8Current
128.6
51.2At 31 December
1,010.4
933.0The carrying amount of receivables approximates their fair value.
The assessment of the expected credit losses did not result in an impairment of receivables. This will be
monitored on a continuous basis going forward and periodically reassessed.
Specification of receivables from subsidiaries non-current:
$ millions Type Interest rate
2020
Long-term
2020
Short-term
2019
Long-term
2019
Short-term
OCI USA Inc. Unsecured 8% fixed -
392.1 -
392.1OCI USA Inc. Unsecured
6.418% fixed
489.7 -
489.7Other receivables
subsidiaries - - 43.8
- 113.7
-Total 43.8
881.8 113.7
881.843. Financial assets at fair value through other comprehensive income
$ millions
2020 2019
Orascom Construction Limited (Dubai)
2.9
3.4Total
2.9
3.4Orascom Construction Limited is a related party.
44. Cash and cash equivalents
$ millions
2020 2019
Bank balances
14.2
92.3Total
14.2
92.3The bank balances are freely available for usage and are not restricted.
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
CONTINUED
OCI N.V.
Annual Report 2020
180Parent Company Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability45. Equity attributable to owners of the Parent Company
45.1 Reconciliation of consolidated income and equity attributable to shareholders to
Parent Company income and equity attributable to owners
$ millions
2020
Equity
2020
Profit / (loss)
2019
Equity
2019
Profit / (loss)
Consolidated equity attributable to owners of
the company
1,131.7 (282.1)
1,357.5 (329.9)
Revaluation of subsidiaries -
7,592.0 -
7,592.0Difference gain on demerger 2015 -
(387.8) -
(387.8)Difference in profit or loss 211.5
2,264.6 256.2
2,008.4Other comprehensive income (127.4)
(1,129.5) 553.4
(1,682.9)Business combination Fertiglobe -
(723.1) -
(674.8)Other direct equity movements (including impact
IFRS 9 adoption)
162.9 -
162.9 -
Impairment subsidiaries (504.8)
(3,680.0) (1,008.6)
(2,671.4)Parent Company equity attributable to owners (750.6)
5,230.8 (481.1)
5,703.9The differences between total shareholders’ equity and total comprehensive income according to the
consolidated financial statements and the parent company financial statements in general relate to
the accounting of investments at cost (fair value as deemed cost upon adoption of IFRS) in the parent
company financial statements and subsequent impairments.
The reconciling items for equity and income are further detailed below.
Revaluation of subsidiaries
The revaluation of subsidiaries of USD 7,592.0 million relates to the step up in fair value at the date of
transition to IFRS, 1 January 2014. The revaluation reserve related to the deemed cost value step-up
of the subsidiaries was subsequently converted into share capital and partly distributed as part of the
demerger transaction of OCI’s E&C Business.
Gain on demerger
In the 2015 parent company financial statements, the demerger gain of USD 243.0 million is lower
compared to the demerger gain as reported in the consolidated financial statements of USD 630.8
million as the investment is stated at cost in the parent company financial statements versus the equity
value in the 2015 consolidated financial statements.
Difference in profit or loss
The 2020 net result is USD 256.2 million lower in the parent company financial statements as the net
loss for 2020 is USD 930.1 million (mainly driven by the impairment in subsidiaries of USD 1,008.6
million), whereas the net loss attributable to owners of the company in the consolidated financial
statements was USD 177.7 million.
The 2019 net result is USD 211.5 million lower in the parent company financial statements as the net
loss for 2019 is USD 628.0 million (mainly driven by the impairment in subsidiaries of USD 504.8 million),
whereas the net loss attributable to owners of the company in the consolidated financial statements
was USD 334.7 million.
Other comprehensive income
The reconciliation item ‘Other comprehensive income’ represents hedge and currency translation
differences which are recognized in the consolidated financial statements but not in the parent company
financial statements as the investments are stated at cost.
The 2020 difference in income of USD 553.4 million comprises USD 556.2 million of currency translation
losses and USD 5.7 million of gains on cash flow hedges and USD 2.9 million losses financial asset at
fair value through other comprehensive income, which do not occur in the parent company financial
statements.
The 2019 difference in income of USD 127.4 million comprises USD 130.4 million of currency translation
gains and USD 0.2 million of gains on cash flow hedges and USD 3.2 million losses financial asset at
fair value through other comprehensive income, which do not occur in the parent company financial
statements.
Business combination Fertiglobe
The Fertiglobe business combination resulted in an increase of USD 723.1 million in equity attributable
to the owners of the company in the consolidated financial statements, but had no impact on the parent
company. Reference is made to note 2.2.1. and note 17.
Other direct equity movements
The other direct equity movements mainly relate to the effect of OCI Beaumont buy-back of minority
shares net of taxes.
Impairment subsidiaries
The Company recorded an impairment on subsidiaries of USD 1,008.6 million in 2020 (2019: USD
504.8 million).
45.2 Appropriation of net profit / (loss)
$ millions
2020 2019
Added to / (deducted from) retained earnings
(930.1)
(628.0)Net profit / (loss) attributable to shareholders
(930.1)
(628.0)Upon adoption of this proposed net profit / (loss) appropriation, the dividend for the 2020 financial year
will be nil. This proposed net profit / (loss) appropriation is in conformity with article 26 of the Company’s
Articles of Association.
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
CONTINUED
OCI N.V.
Annual Report 2020
181Parent Company Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability46. Loans and borrowings
$ millions
2020 2019
Senior notes
2,316.1
2,444.3Term loan and revolving credit facility
344.6
178.1Sub-total third-party
2,660.7
2,622.4OCI Chem 5 B.V.
0.4
-OCI Overseas Holding Ltd.
0.8
1.1OCI Nitrogen
267.5
111.0OCI Methanol Marketing B.V.
4.0
-OCI Fuels B.V.
3.4
-OCI Chemicals B.V.
1.1
-Sub-total subsidiaries
277.2
112.1Total
2,937.9
2,734.5Non-current
2,660.7
2,622.4Current
277.2
112.1At 31 December
2,937.9
2,734.5Reference is made to note 18 ‘Loans and borrowings’ of the consolidated financial statements for
detailed information on third-party loans and the undrawn bank facility.
The carrying amounts of loans and borrowings from subsidiaries approximates their fair values.
$ millions
2020 2019
Balance at 1 January
2,734.5
2,035.6Proceeds from borrowings
1,675.0
1,631.3Proceeds from borrowings subsidiaries
145.9
68.0Proceeds from borrowings subsidiaries in kind
113.7
44.4Redemptions of borrowings
(1,756.1)
(936.6)Redemptions of borrowings subsidiaries
-
(6.2)Redemptions of borrowings subsidiaries in kind
(114.1)
(66.8)Newly incurred transaction costs
(9.3)
(22.2)Amortization of transaction costs / (bond) premiums
24.4
11.4Effect of movement in exchange rates
123.8
(25.3)Accrued interest
0.1
0.9At 31 December
2,937.9
2,734.5Net proceeds from borrowings third-party
Proceeds from borrowings in 2020 for the Company totaled an amount of USD 1,675.0 million (2019:
USD 1,631.3 million). Reference is made to note 18 of the consolidated financial statements.
Net proceeds from borrowings from subsidiaries in kind
Proceeds from borrowings from subsidiaries in kind of USD 113.7 million consists of USD 113.1 million
cashpool settlements and USD 0.6 million settlements with OCI Overseas Holding.
Redemptions of borrowings from subsidiaries in kind
Redemptions of borrowings from subsidiaries in kind of USD 114.1 million consist of USD 113.1 million
to OCI Nitrogen and USD 1.0 million to OCI Overseas Holding.
The maturity dates of loans and borrowings from third-party and related party are as follows:
$ millions
2020 2019
2021
-
-2022
-
-2023
350.0
1,283.52024
1,455.7
1,384.92025
889.0
-Sub-total
2,694.7
2,668.4Deducted transaction costs
(34.0)
(46.0)Total
2,660.7
2,622.4Specification of loans and borrowings from subsidiaries:
$ millions Type Interest %
2020
Long-term
2020
Short-term
2019
Long-term
2019
Short-term
OCI Overseas
Holding Ltd.
Unsecured LIBOR + 3.25 1.1
- 0.8
-OCI Nitrogen Unsecured 0.05% 111.0
- -
-OCI Nitrogen Unsecured Deposit rate 0% -
- 267.5
-OCI Chemicals B.V. Unsecured Deposit rate 0% -
- 1.1
-OCI Methanol
Marketing B.V.
Unsecured Deposit rate 0% -
- 4.0
-OCI Fuels B.V. Unsecured Deposit rate 0% -
- 3.4
-OCI Chem 5 B.V. Unsecured Deposit rate 0% -
- 0.4
-Total 112.1
- 277.2
-NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
CONTINUED
OCI N.V.
Annual Report 2020
182Parent Company Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability47. Other payables
$ millions
2020 2019
Payables due to subsidiaries
22.9
128.3Payables due to related parties
-
7.8Share-based compensation
-
0.1Accrued interest
18.8
29.6Commodity derivative financial instruments
10.9
0.7Other current liabilities
12.8
29.7Total
65.4
196.2Non-current
-
-Current
65.4
196.2Total
65.4
196.2The carrying amount of ‘Other payables’ approximates its fair value.
48. Revenue from dividend income
Revenue from dividend income in 2020 consists of USD 176.9 million from OCI Intermediate of which
USD 176.9 million was in cash.
49. Development of general and administrative expenses
a. Expenses by nature
$ millions Note
2020 2019
Employee benefit expenses (b)
15.8
15.6Depreciation
0.8
0.7Consultancy expenses
12.5
33.1Other
1.6
5.7Total
30.7
55.1The expenses by nature comprise ‘general and administrative expenses’.
b. Employee benefit expenses
$ millions
2020 2019
Wages and salaries
5.5
4.7Social securities
0.3
0.3Employee profit sharing
1.5
3.6Pension cost
0.6
0.5Share-based compensation expense
7.9
6.5Total
15.8
15.6For specifications on share-based payments, reference is made to note 22c of the notes to the
consolidated financial statements.
50. Other income
$ millions
2020 2019
Other
0.1
0.2Total
0.1
0.251. Other expenses
$ millions
2020 2019
Impairment of subsidiaries
1,008.6
504.8Other
21.5
38.9Total
1,030.1
543.7Reference is made to note 41 for the impairment of subsidiaries. The decrease in other is mainly due to
losses on derivatives in 2019.
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
CONTINUED
OCI N.V.
Annual Report 2020
183Parent Company Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability52. Net finance cost
$ millions
2020 2019
Interest income on loans and receivables third-party
0.1
0.2Interest income on loans and receivables related parties
-
-Interest income on loans and receivables subsidiaries
65.7
41.1Foreign exchange gain
169.3
39.0Finance income
235.1
80.3Interest expense and other financing costs on financial liabilities measured
at amortized cost third-party
(198.2)
(140.7)Interest expense and other financing costs on financial liabilities measured
at amortized cost related party
-
-Interest expense and other financing costs on financial liabilities measured
at amortized cost subsidiaries
(0.2)
(1.0)Foreign exchange loss
(86.3)
(50.5)Finance cost
(284.7)
(192.2)Net finance (cost) recognized in profit or loss
(49.6)
(111.9)53. Income taxes
53.1 Income tax in the statement of profit or loss
$ millions
2020 2019
Current tax
12.7
29.9Deferred tax
(9.4)
0.1Total income tax in profit or loss
3.3
30.0Current tax
$ millions
2020 2019
Current year
12.5
20.5Changes in estimates relating to prior years
0.2
9.4Income tax benefit / (expense) in profit or loss
12.7
29.9Deferred tax
$ millions
2020 2019
Origination and reversal of temporary differences
0.3
0.1Valuation allowance
(9.7)
-Income tax benefit / (expense) in profit or loss
(9.4)
0.153.2 Reconciliation of effective tax rate
Reconciliation of the statutory income tax rate in the Netherlands with the effective tax rate can be
summarized as follows:
$ millions
2020
%2019
%Profit / (loss) before income tax
(933.4)
(658.0)Enacted income tax rate in the
Netherlands
25%
25%
Tax calculated at statutory tax rate 25.0
233.4 25.0
164.5Impairment of subsidiaries (19.2)
(252.2) (27.0)
(126.2)Expenses non-deductible
1
(12.6) (1.3)
(31.6) (4.8)
Income not subject to tax
2
44.2 4.7
13.4 2.1
Unrecognized tax assets -
(9.7) (1.0)
-Changes in estimates relating to prior
years 1.5
0.2 -
9.9Total income tax in profit or loss 4.6
3.3 0.4
30.01
The non-deductible expenses mainly relate to non-deductible interest expense as a result of the 30% EBITDA limitation and
non-deductible shareholder costs.
2
Income not subject to tax related to dividend income in 2020 of USD 176.9 million gross.
53.3 Deferred income tax assets and liabilities
Changes in deferred tax assets and liabilities:
$ millions
2020 2019
At 1 January
4.8
(1.6)Profit or loss
(9.4)
0.1Effect of movement in exchange rates
-
-Other
3.4
6.3At 31 December
(1.2)
4.8NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
CONTINUED
OCI N.V.
Annual Report 2020
184Parent Company Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability53. Income taxes
(continued)
Other relates to change of position from net operating losses being capitalized on the balance sheet in
2019 to creating a valuation allowance for a deferred tax asset in relation to the operating losses.
Recognized deferred tax assets and liabilities:
Assets Liabilities Net
$ millions
2020 2019 2020 2019 2020 2019
Trade and other
receivables
-
-(0.4)
(0.2)(0.4)
(0.2)Loans and borrowings
-
-(1.1)
-(1.1)
-Trade and other payables
0.3
--
(1.3)0.3
(1.3)Operating losses carry
forward and tax credits
-
6.3-
--
6.3Total
0.3
6.3(1.5)
(1.5)(1.2)
4.8Netting of fiscal positions
(0.3)
(1.5)0.3
1.5-
-Amounts recognized
in the Statement of
Financial Position
-
4.8(1.2)
-(1.2)
4.8Of the deferred tax liabilities at 31 December 2020, an amount of USD 0.6 million is to be settled within
12 months.
Expiration scheme of gross unrecognized carry forward tax losses:
2020
$ millions
Less than
1 year
Between
1 and 5
years
Between
5 and 10
years
Between
10 and 15
years
Between
15 and 20
years Unlimited
Total
Gross federal tax
losses
- 41.6 - - - -
41.6
Unrecognized
operating losses
carry forward
- - - -
41.6
-41.6
54. Related party transactions
For an overview of the related parties, reference is made to note 30 of the consolidated financial
statements. The Company has the following current account related party balances as at
31 December 2020:
Related party
Relation
Revenue
transactions
during the
year
AR
outstanding at
year end
Purchase
transactions
during the
year
AP
outstanding at
year end
Loans
receivables
Loans
payables
Interest
income
Interest
expense
Orascom
Construction PLC
(‘OC’)
OC group
company
- - - - - - - -
Contrack
International
OC group
company
-
- - - - - - -
Nassef Sawiris
CEO
-
- 0.7 0.2 - - - -
NNS Luxembourg
Sarl
Related via
shareholder
-
- 0.2 0.2 - - - -
Total
- - 0.9 0.4 - - - -
The Company has the following current account related party balances as at 31 December 2019:
Related party
Relation
Revenue
transactions
during the
year
AR
outstanding at
year end
Purchase
transactions
during the
year
AP
outstanding at
year end
Loans
receivables
Loans
payables
Interest
income
Interest
expense
Orascom
Construction PLC
(‘OC’)
OC group
company - 0.2 - - - - - -
Contrack
International
OC group
company
-
- 0.1 0.5 - - - -
Nassef Sawiris
CEO -
- 1.0 0.2 - - - -
NNS Luxembourg
Sarl
Related via
shareholder -
- 0.2 7.1 - - - -
Total
- 0.2 1.3 7.8 - - - -
The current accounts consist of management fees, transferred cost and other.
All outstanding related party balances are unsecured.
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
CONTINUED
OCI N.V.
Annual Report 2020
185Parent Company Financial Statements
Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainability55. Contingencies
Guarantees
OCI has provided financial guarantees to certain subsidiaries including OCI Nitrogen related to its
inventory financing. For OFT, OFTS and OCI S.A.E. a comfort letter was provided by OCI.
The Company has a guarantee facility with Rabobank for a maximum guarantee amount of USD 140.6
million (EUR 115.0 million). Under this guarantee facility, USD 83.3 million (EUR 68.2 million) has been
drawn. The facility is used to issue guarantees on behalf of the subsidiaries, mainly for operational
purposes.
OCI has an uncommitted surety facility with Tokio Marine Europe SA and Zürich Insurance PLC for a
maximum guarantee amount of USD 30.6 million (EUR 25.0 million). This facility is fully utilized. The
facility is used to issue a performance guarantee on behalf of OCI Nitrogen BV.
The Company also has a guarantee facility with BNP for an amount of USD 93.7 million, that is fully
drawn.
56. Employees
The total number of employees in 2020 was 29 (2019: 32 employees).
57. Fiscal unity
OCI N.V. forms a fiscal unity with several Dutch entities for corporation tax purposes. In accordance with
the standard conditions, a company and its subsidiaries that form the fiscal unity are jointly and severally
liable for taxation payable by the fiscal unity. The following entities are included in the fiscal unity headed
by OCI N.V.:
· OCI N.V.
· OCI Intermediate B.V.
· OCI Nitrogen B.V.
· OCI Personnel B.V.
· OCI Terminal Europoort B.V.
· OCI Fertilizers B.V.
· OCI China Holding B.V.
Amsterdam, the Netherlands, 22 March 2021
The OCI N.V. Board of Directors
Michael Bennett
Nassef Sawiris
Ahmed El-Hoshy
Hassan Badrawi
Sipko Schat
Jérôme Guiraud
Robert Jan van de Kraats
Gregory Heckman
Anja Montijn-Groenewoud
Maud de Vries
David Welch
Dod Fraser
Heike van de Kerkhof
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
CONTINUED
OCI N.V.
Annual Report 2020
186Business performanceStrategy and value creation Risk management and compliance Corporate governance
Financial statements
Other informationSustainabilityOTHER INFORMATION
Extract from the Articles of Association relating to Net Profit /(Loss) appropriation
Article 26. ‘Profits and Distributions’.
26.1 The Board may decide that the profits realized during a financial year will fully or partially be
appropriated to increase and/or from reserves.
26.2 The profits remaining after application of Article 26.1 shall be put at the disposal of the General
Meeting. The Board shall make a proposal for that purpose. A proposal to pay a dividend shall be dealt
with as a separate agenda item at the General Meeting of Shareholders.
26.3 Distributions from the Company’s distributable reserves are made pursuant to a resolution of the
General Meeting at the proposal of the Board.
26.4 Provided it appears from an interim statement of assets signed by the Board that the requirement
mentioned in Article 26.8 concerning the position of the Company’s assets has been fulfilled, the Board
may make one or more interim distributions to the holders of Shares.
26.5 The Board may decide that a distribution on Shares shall not take place as a cash payment but as
a payment in Shares, or decide that holders of Shares shall have the option to receive a distribution as
a cash payment and / or as a payment in Shares, out of the profit and / or at the expense of reserves,
provided that the Board is designated by the General Meeting pursuant to Articles 6.2. The Board shall
determine the conditions applicable to the aforementioned choices.
26.6 The Company’s policy on reserves and dividends shall be determined and can be amended by the
Board. The adoption and thereafter each amendment of the policy on reserves and dividends shall be
discussed and accounted for at the General Meeting of Shareholders under a separate agenda item.
26.7 The Company may further have a policy with respect to profit participation for employees which
policy will be established by the Board.
26.8 Distributions may be made only insofar as the Company’s equity exceeds the amount of the paid
in and called up part of the issued capital, increased by the reserves which must be kept by virtue of the
law or these Articles of Association.
Other
information
188 Independent
auditor's report
197 Alternative
performance
measures (APMs)
199 GRI Index
204 TCFD Index
205 SASB Index
207 ESG performance
summary
210 Glossary of abbreviations
and key terms
212 Shareholder
information
OCI N.V.
Annual Report 2020
187
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements
Other information
Sustainability
OCI N.V.
Annual Report 2020
188INDEPENDENT AUDITOR’S REPORT
To: the General Meeting of Shareholders of OCI N.V.
Report on the audit of the 2020 nancial statements included in the
annual report
Our opinion
In our opinion the accompanying nancial statements give a true and fair view of the nancial
position of OCI N.V. as at 31 December 2020 and of its result and its cash ows for the year
then ended, in accordance with International Financial Reporting Standards as adopted by the
European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code.
What we have audited
We have audited the 2020 nancial statements of OCI N.V. (the Company) based in
Amsterdam, the Netherlands.
The nancial statements comprise:
1 the Consolidated and Parent Company Statement of Financial Position as at 31 December
2020;
2 the following Consolidated and Parent Company Statements for 2020: the Statement of Prot
or Loss and Other Comprehensive Income, Changes in Equity and Cash Flows; and
3 the notes comprising a summary of the signicant accounting policies and other explanatory
information.
Basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards
on Auditing. Our responsibilities under those standards are further described in the ‘Our
responsibilities for the audit of the nancial statements’ section of our report.
We are independent of OCI N.V. in accordance with the ‘Verordening inzake de
onafhankelijkheid van accountants bij assurance-opdrachten’ (ViO, Code of Ethics for
Professional Accountants, a regulation with respect to independence) and other relevant
independence regulations in the Netherlands. Furthermore, we have complied with the
‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics).
We believe the audit evidence we have obtained is sufcient and appropriate to provide a basis
for our opinion.
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements
Other information
Sustainability
OCI N.V.
Annual Report 2020
189INDEPENDENT AUDITOR’S REPORT
CONTINUED
Audit approach
Summary
Materiality
– Materiality of USD 30 million for the consolidated financial statements, which is 0.9% of
consolidated total revenue;
– Materiality of USD 60 million for the parent company financial statements, which is 0.7%
of the parent company total assets.
Group audit
– 98% of total consolidated assets;
– 98% of consolidated revenue.
Key audit matter
1. Recoverable amount in impairment tests;
2. Claims and litigation.
Opinion
Unqualified opinion
Materiality
Based on our professional judgement, we determined the materiality for the consolidated
nancial statements as a whole at USD 30 million (2019: USD 25 million). The materiality is
determined with reference to the consolidated revenues, of which it represents 0.9% (2019:
0.8%). We deem prot before tax from continuing operations as not representative because
the benchmark has historically been highly volatile. As such, we consider revenues as the most
appropriate benchmark as the Company is result oriented.
We determined a separate materiality for our audit of the parent company nancial statements.
Based on our professional judgement, we determined the materiality for the parent company
nancial statements at USD 60 million (2019: USD 60 million) using parent company total
assets as a benchmark, of which it represents 0.7% (2019: 0.7%). Given the nature of the
parent company’s activities – the holding and nancing of investments within the Company –
we consider the use of the total asset benchmark as most appropriate in respect of the parent
company nancial statements.
We have also taken into account misstatements and/or possible misstatements that in our
opinion are material for the users of the consolidated and parent company nancial statements
for qualitative reasons.
We agreed with the Board of Directors that misstatements in excess of USD 1.25 million and
USD 3 million which have been identied during the audit of the consolidated and parent
company nancial statements respectively, would be reported to them, as well as smaller
misstatements that in our view must be reported on qualitative grounds.
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements
Other information
Sustainability
OCI N.V.
Annual Report 2020
190INDEPENDENT AUDITOR’S REPORT
CONTINUED
Scope of the group audit
OCI N.V. is at the head of a group of components. The nancial information of this group is
included in the consolidated nancial statements of OCI N.V.
Our group audit mainly focused on signicant components, including the signicant equity
accounted investment. To ensure sufcient coverage over the group’s nancial information,
we have requested 14 component auditors (2019: 14 component auditors) to perform a full
scope audit of the nancial information of the related component (audit of complete reporting
package). Furthermore, we requested 4 component auditors (2019: 2 component auditors) to
perform specied audit procedures. The relative size of the component and the likelihood for
the component to include a signicant risk were both evaluated in determining the scope of our
component audits.
For the remaining components we have performed audit procedures ourselves or performed
analytical procedures in order to corroborate our assessment that the risk of material
misstatement in the residual population is less than reasonable possible.
We provided detailed instructions to all component auditors as part of the group audit, covering
the signicant audit areas, including the relevant risks of material misstatement identied
by us, and set out the information required to be reported back to us. In view of restrictions,
caused by the COVID-19 pandemic, on the movement of people across borders, and also
within signicantly affected countries, we have considered making changes to the planned
audit approach to evaluate the component auditors’ communications and the adequacy of their
work. According to our original audit plan, we intended to visit the components in countries
Abu Dhabi, Algeria, Egypt and United States of America to review selected component auditor
documentation. Due to the aforementioned restrictions, this was not feasible in the current
environment. As a result, we have requested those component auditors to provide us with remote
access to audit workpapers to perform these evaluations, subject to local law and regulations.
In addition, due to the inability to arrange in-person meetings with such component auditors, we
have increased the use of alternative methods of communication with them, including through
written instructions, exchange of emails and virtual meetings.
We have assessed these expanded communications, with additional robust discussions as
needed, to ensure that they are sufcient for us to evaluate and conclude on the appropriateness
and adequacy of the component auditor’s work. Video conferences were held with all the
component auditors that were part of the group audit. During these conferences, the planning,
audit approach, ndings and observations were reviewed and discussed. Any further work
deemed necessary was subsequently performed by the component auditors and reviewed by us.
For the residual population not in scope we performed analytical procedures in order to
corroborate that our scoping remained appropriate throughout the audit.
By performing the procedures mentioned above at group components, together with additional
procedures at group level, we have been able to obtain sufcient and appropriate audit evidence
about the group’s nancial information to provide an opinion about the nancial statements.
This resulted in a coverage of 98% of consolidated total assets and of 98% of consolidated total
revenue.
The audit coverage as stated in the section summary can be further specied as follows:
91%
Audit of the
complete reporting
package
Total assets
Revenue
5%
Audit of specic
items
2%
Specied audit
procedures
79%
Audit of the
complete reporting
package
0%
Audit of specic
items in revenue is
not applicable
19%
Specied audit
procedures
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements
Other information
Sustainability
OCI N.V.
Annual Report 2020
191Our focus on the risk of fraud and non-compliance with laws and regulations
Our objectives
The objectives of our audit with respect to fraud and non-compliance with laws and regulations
are:
With respect to fraud:
- to identify and assess the risks of material misstatement of the nancial statements due to
fraud;
- to obtain sufcient appropriate audit evidence regarding the assessed risks of material
misstatement due to fraud, through designing and implementing appropriate audit responses;
and
- to respond appropriately to fraud or suspected fraud identied during the audit.
With respect to non-compliance with laws and regulations:
- to identify and assess the risk of material misstatement of the nancial statements due to
non-compliance with laws and regulations; and
- to obtain a high (but not absolute) level of assurance that the nancial statements, taken as
a whole, are free from material misstatement, whether due to fraud or error when considering
the applicable legal and regulatory framework.
The primary responsibility for the prevention and detection of fraud and non-compliance with
laws and regulations lies with the Management Board. We refer to chapter ‘Risk Management’
of the Annual Report where the Management Board included its risk assessment.
Our risk assessment
As part of our process of identifying fraud risks, we evaluated fraud risk factors with respect to
nancial reporting fraud, misappropriation of assets and bribery and corruption. We, together
with our forensics specialists, evaluated the fraud risk factors to consider whether those factors
indicated a risk of material misstatement due to fraud.
In addition, we performed procedures to obtain an understanding of the legal and regulatory
frameworks that are applicable to the Company and we inquired Management Board
as to whether the entity is in compliance with such laws and regulations and inspected
correspondence, if any, with relevant regulatory authorities.
The potential effect of the identied laws and regulations on the nancial statements varies
considerably.
Firstly, the Company is subject to laws and regulations that directly affect the nancial
statements, including taxation and nancial reporting. We assessed the extent of compliance
with these laws and regulations as part of our procedures on the related nancial statement
items and therefore no additional audit response is necessary.
Secondly, the Company is subject to many other laws and regulations where the consequences
of non-compliance could have an indirect material effect on amounts recognised or disclosures
provided in the nancial statements, or both, for instance through the imposition of nes or
litigation. We identied the following areas as those most likely to have such an indirect effect:
- Employment legislation;
- Health and safety regulation;
- Environmental regulation;
- Anti-bribery and corruption laws and regulations;
- Anti-money laundering laws and regulations;
- Trade sanctions and export controls laws and regulations.
In accordance with the auditing standard we evaluated the following fraud and non-compliance
risks that are relevant to our audit:
- revenue recognition, in relation to overstatement of revenue due to manual override of sales
cut-off and non-routine sales transactions (a presumed risk); and
- management override of controls (a presumed risk).
We communicated the identied risks of fraud and non-compliance with laws and regulations
throughout our team and remained alert to any indications of fraud and non-compliance
throughout the audit. This included communication from the group to component audit teams,
and vice versa, of relevant risks of fraud identied at their respective levels. In all of our audits,
we addressed the risk of management override of internal controls, including evaluating
whether there was evidence of bias by management that may represent a risk of material
misstatement due to fraud.
We communicated our risk assessment and audit response to management as well as the
Audit Committee. Our audit procedures differ from a specic forensic fraud investigation, which
investigation often has a more in-depth character.
INDEPENDENT AUDITOR’S REPORT
CONTINUED
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements
Other information
Sustainability
OCI N.V.
Annual Report 2020
192Our response
We performed the following audit procedures (not limited) to respond to the assessed risks:
- We evaluated the design and the implementation and, where considered appropriate, tested
the operating effectiveness of internal controls that mitigate fraud risks. In case of internal
control deciencies, where we considered there would be opportunity for fraud, we performed
supplemental detailed risk-based testing.
- We performed data analysis of high-risk journal entries. Also we evaluated key estimates
and judgements for bias by the Company, including retrospective reviews of prior year’s
estimates. Where we identied instances of unexpected journal entries or other risks through
our data analytics, we performed additional audit procedures to address each identied risk.
These procedures also included testing of transactions back to source information.
- Assessment of matters reported via the Company’s whistleblower and complaints hotline and
results of management’s investigation of such matters.
- With respect to the risk of fraud in revenue recognition we have evaluated the design and
the implementation and, where considered appropriate, tested the operating effectiveness
of internal controls. We performed substantive audit procedures over the manual and non-
routine sales transactions and sales reversal transactions surrounding cut-off to address the
signicant risk with regards to fraudulent revenue recognition.
- With respect to the risk of bribery and corruption across various countries, we evaluated
the Company’s controls and procedures such as due diligence procedures on third parties.
We considered the possibility of fraudulent or corrupt payments made through third
parties including agents and conducted detailed testing on third-party vendors in high-risk
jurisdictions.
- We incorporated elements of unpredictability in our audit.
- We considered the outcome of our other audit procedures and evaluated whether any ndings
or misstatements were indicative of fraud or non-compliance. If so, we re-evaluated our
assessment of relevant risks and its resulting impact on our audit procedures.
- We obtained audit evidence regarding compliance with the provisions of those laws and
regulations generally recognised to have a direct effect on the determination of material
amounts and disclosures in the nancial statements.
We considered the effect of actual, suspected or identied risk of non-compliance as part of our
procedures on the related nancial statement items. We do note that our audit is based on the
procedures described in line with applicable auditing standards. In addition to the requirements
of the auditing standards we have performed, amongst others, the following incremental
procedures:
- Incorporated specic procedures on fraud within our selection of high risk journal entries;
- Investigation into publicly held information in relation to negative publicity;
- Interviews with both corporate and local compliance ofcers and external legal counsel with
regards to the Litigation and claims as described in the respective key audit matter.
Our procedures to address identied risks of fraud did not result in a key audit matter. W
e
do note that our audit is not primarily designed to detect fraud and non-compliance with laws
and regulations and that management is responsible for such internal control as management
determines is necessary to enable the preparation of the nancial statements that are free
from material misstatement, whether due to errors or fraud, including compliance with laws and
regulations.
The more distant non-compliance with indirect laws and regulations (irregularities) is from
the events and transactions reected in the nancial statements, the less likely the inherently
limited procedures required by auditing standards would identify it. In addition, as with any
audit, there remained a higher risk of non-detection of irregularities, as these may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.
Our key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
signicance in our audit of the nancial statements. We have communicated the key audit
matters to the Board of Directors. The key audit matters are not a comprehensive reection of
all matters discussed.
These matters were addressed in the context of our audit of the nancial statements as a
whole and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
Compared to last year the key audit matter with respect to the accounting of the purchase
price allocation in respect to the acquisition of Ruwais Fertilizer Industries Ltd. (“Fertil”) is not
included, as this was a 2019 transaction. Furthermore, compared to last year the key audit
matter with respect to litigations and claims has been added.
INDEPENDENT AUDITOR’S REPORT
CONTINUED
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements
Other information
Sustainability
OCI N.V.
Annual Report 2020
193INDEPENDENT AUDITOR’S REPORT
CONTINUED
#1 Recoverable amount in impairment tests
Description
As described in Note 8 to the consolidated financial statements, management performs a
yearly goodwill impairment test. In addition, management performs a triggering event analysis
with respect to the valuation of (fixed) assets as described in Note 5.
Impairment tests under IFRS require to assess whether the entities’ assets are not carried
at more than their recoverable amount (i.e. the higher of fair value less costs of disposal and
the value in use). As such, the Company determined the value in use based on the individual
cash generating units’ value in use. This requires significant estimates in respect of key
assumptions used in the value in use models such as:
•
production volumes;
•
sales prices;
•
gas prices;
•
terminal growth rate; and
•
weighted average cost of capital (“WACC”).
Furthermore, as described in Note 41 to the parent company financial statements,
management identified a triggering event in respect of the impairment indicators of the
valuation of subsidiaries.
With regards to valuation of subsidiaries management has determined the recoverable
amount based on the fair value less cost of disposal. The valuation was conducted based on
the market capitalisation of the group considering the net-debt position and application of a
control premium.
The valuation of goodwill is considered to be significant to our audit due to management
judgement involved in the assumptions used and contains a significant risk of error due to the
complexity of the calculations .
Our response
We evaluated the design and implementation of relevant controls related to the client
impairment trigger assessment and annual goodwill impairment testing. We reviewed the
impairment trigger assessment and valuation models as prepared by management, this
includes an evaluation of management assessment of cash generating units, the retrospective
review and a sensitivity assessment of significant assumptions used in the model.
#1 Recoverable amount in impairment tests
(continued)
In our audit we evaluated the appropriateness of the cash flow projections of the identified
cash generating units. In respect of the key assumptions, we obtained managements
business plans and amongst others:
•
compared the production volumes with the historical average’s and external forecasts;
•
compared the sales prices with historical and external forward prices;
•
compared the gas price with historical and external forward gas prices; and
•
involved KPMG valuation specialist to recalculated the WACC and assess the
reasonableness of the terminal growth rate.
We furthermore specifically focused on the sensitivity in the available headroom, evaluating
whether a reasonably possible change in assumptions could cause the carrying amount
to exceed its recoverable amount and assessed the historical accuracy of management’s
estimates. We involved KPMG valuation specialists to support the audit team in making these
assessments. Furthermore, we assessed the adequacy of the disclosure (Note 8) to the
consolidated financial statements.
In our audit we evaluated the management’s procedures with regards to valuation of
subsidiaries based on their fair value less cost of disposal, this assessment includes
an evaluation of the design and implementation of relevant controls with regards to
management’s trigger assessment and the valuation model. An impairment of USD 1,008
million has been recorded. The impairment has been determined based on the cost value
of the subsidiaries and the market capitalisation of the group, corrected for net debt and a
30% control premium. We involved KPMG valuation specialists to support the audit team
in determining the appropriateness of these assumptions. Furthermore, we assessed the
adequacy of the disclosure (Note 41) to the parent company financial statements.
Our observation
Based on our procedures performed, we consider management’s key assumptions and
methodology used in the impairment tests to be within a reasonable range. Furthermore,
we determined that the related disclosure for the valuation of the subsidiaries in the parent
company financial statements (Note 41) and the disclosures in respect of the goodwill
impairment test (Note 8) are adequate.
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements
Other information
Sustainability
OCI N.V.
Annual Report 2020
194#2 Litigation and claims
Description
As disclosed in Provisions (Note 21) and Contingencies (Note 28) the Company has several
litigations and claims (both legal and tax related) pending, for which the outcome is uncertain.
Based on the likelihood of occurrence and the exposure, the Company determines if, and
for what amount, a provision should be recognised. This assessment is considered to be
significant to our audit due to management judgement involved. As the Company is diversified
globally, the pending claims and litigations differ in terms of risk profile.
Our response
During our audit, we performed the following procedures:
•
Instructed our component auditors to perform procedures over litigations and claims on a
local level;
•
Evaluated the legal expenses and requested external legal letters for lawyers involved in
litigations and claims;
•
Obtained and inspected the quarterly updated Litigation report from Group Legal
department;
•
Performed quarterly update meetings with Group Legal and Tax departments;
•
Obtained internal position papers from management on the cases including the accounting
implications;
•
Requested external expert opinions for specific cases with a significant exposure;
•
Assessed the adequacy of the disclosure to the financial statements.
Our observation
Based on our procedures performed, we verified the reasonableness of the provision
recorded for litigations and claims. We consider management’s assessment of the exposure
and the recording of related provisions to be appropriate. Furthermore, we determined that
the related disclosure with regards to Provisions (Note 21) and Contingencies (Note 28) are
adequate.
Report on the other information included in the annual report
In addition to the nancial statements and our auditor’s report thereon, the annual report
contains other information.
Based on the following procedures performed, we conclude that the other information:
- is consistent with the nancial statements and does not contain material misstatements; and
- contains the information as required by Part 9 of Book 2 of the Dutch Civil Code.
We have read the other information. Based on our knowledge and understanding obtained
through our audit of the nancial statements or otherwise, we have considered whether the
other information contains material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the
Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is less
than the scope of those performed in our audit of the nancial statements.
The Board of Directors is responsible for the preparation of the other information, including the
information as required by Part 9 of Book 2 of the Dutch Civil Code.
Report on other legal and regulatory requirements and ESEF
Engagement
We were engaged by the General Meeting of Shareholders as auditor of OCI N.V. on 17 June
2020 for the year 2020. Our rst appointment as statutory auditor of the Company was in 2013
to audit the 2013 nancial statements.
No prohibited non-audit services
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU
Regulation on specic requirements regarding statutory audits of public-interest entities.
INDEPENDENT AUDITOR’S REPORT
CONTINUED
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements
Other information
Sustainability
OCI N.V.
Annual Report 2020
195European Single Electronic Format (ESEF)
OCI N.V. has prepared its annual report in ESEF. The requirements for this format are set out
in the Commission Delegated Regulation (EU) 2019/815 with regard to regulatory technical
standards on the specication of a single electronic reporting format (these requirements are
hereinafter referred to as: the RTS on ESEF).
In our opinion, the annual report prepared in the XHTML format, including the partially tagged
consolidated nancial statements as included in the reporting package by OCI N.V. has been
prepared in all material respects in accordance with the RTS on ESEF.
Management is responsible for preparing the annual report including the nancial statements in
accordance with the RTS on ESEF, whereby management combines the various components
into a single reporting package. Our responsibility is to obtain reasonable assurance for our
opinion whether the annual report in this reporting package, is in accordance with the RTS on
ESEF.
Our procedures taking into consideration Alert 43 of NBA (the Netherlands Institute of
Chartered Accountants), included amongst others:
- obtaining an understanding of the entity’s nancial reporting process, including the
preparation of the reporting package;
- obtaining the reporting package and performing validations to determine whether the
reporting package containing the Inline XBRL instance document and the XBRL extension
taxonomy les have been prepared in accordance with the technical specications as
included in the RTS on ESEF;
- examining the information related to the consolidated nancial statements in the reporting
package to determine whether all required taggings have been applied and whether these
are in accordance with the RTS on ESEF.
Description of responsibilities regarding the nancial statements
Responsibilities of the Board of Directors for the nancial statements
The Board of Directors is responsible for the preparation and fair presentation of the nancial
statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code.
Furthermore, the Board of Directors is responsible for such internal control as management
determines is necessary to enable the preparation of the nancial statements that are free from
material misstatement, whether due to fraud or error.
As part of the preparation of the nancial statements, the Board of Directors is responsible
for assessing the Company’s ability to continue as a going concern. Based on the nancial
reporting frameworks mentioned, the Board of Directors should prepare the nancial
statements using the going concern basis of accounting unless the Board of Directors either
intends to liquidate the Company or to cease operations, or has no realistic alternative but to do
so. The Board of Directors should disclose events and circumstances that may cast signicant
doubt on the Company’s ability to continue as a going concern in the nancial statements.
The Board of Directors is responsible for overseeing the Company’s nancial reporting process.
Our responsibilities for the audit of the nancial statements
Our objective is to plan and perform the audit engagement in a manner that allows us to obtain
sufcient and appropriate audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means
we may not detect all material errors and fraud during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to inuence the economic decisions of users
taken on the basis of these nancial statements. The materiality affects the nature, timing and
extent of our audit procedures and the evaluation of the effect of identied misstatements on
our opinion.
A further description of our responsibilities for the audit of the nancial statements is included in
the appendix of this auditor’s report. This description forms part of our auditor’s report.
Amstelveen, 22 March 2021
KPMG Accountants N.V.
C.A. Bakker RA
INDEPENDENT AUDITOR’S REPORT
CONTINUED
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements
Other information
Sustainability
OCI N.V.
Annual Report 2020
196INDEPENDENT AUDITOR’S REPORT
CONTINUED
Appendix
Description of our responsibilities for the audit of the nancial statements
We have exercised professional judgement and have maintained professional scepticism
throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements and
independence requirements. Our audit included among others:
- identifying and assessing the risks of material misstatement of the nancial statements,
whether due to fraud or error, designing and performing audit procedures responsive to those
risks, and obtaining audit evidence that is sufcient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than
the risk resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control;
- obtaining an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company’s internal control;
- evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the Board of Directors;
- concluding on the appropriateness of the Board of Directors’ use of the going concern basis
of accounting, and based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast signicant doubt on Company’s ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the nancial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’
s report. However, future
events or conditions may cause a company to cease to continue as a going concern;
- evaluating the overall presentation, structure and content of the nancial statements,
including the disclosures; and
- evaluating whether the nancial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
We are solely responsible for the opinion and therefore responsible to obtain sufcient
appropriate audit evidence regarding the nancial information of the entities or business
activities within the group to express an opinion on the nancial statements. In this respect we
are also responsible for directing, supervising and performing the group audit.
We communicate with the Board of Directors regarding, among other matters, the planned
scope and timing of the audit and signicant audit ndings, including any signicant ndings
in internal control that we identify during our audit. In this respect we also submit an additional
report to the audit committee in accordance with Article 11 of the EU Regulation on specic
requirements regarding statutory audits of public-interest entities. The information included in
this additional report is consistent with our audit opinion in this auditor’
s report.
We provide the Board of Directors with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships
and other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated with the Board of Directors, we determine the key audit
matters: those matters that were of most signicance in the audit of the nancial statements.
We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, not communicating the
matter is in the public interest.
ALTERNATIVE PERFORMANCE
MEASURES (APM
s)
In this Annual Report, 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. OCI believes that an understanding of its financial performance is
enhanced by reporting the following APMs:
• EBITDA
• Adjusted EBITDA
• Adjusted net income
• Free cash flow
EBITDA, adjusted EBITDA, adjusted net income and free cash flow are supplemental measures
of financial performance that are not required by, or presented in accordance with, IFRS.
Therefore, EBITDA, adjusted EBITDA, adjusted net income and free cash flow should be viewed
as supplemental but not as a substitute for measures presented in the Consolidated Statement of
Profit or Loss and Other Comprehensive Income, which are determined in accordance with IFRS.
External stakeholders should not consider EBITDA, adjusted EBITDA, adjusted net income and
free cash flow (a) as an alternative to operating profit or profit/(loss) before taxation (as determined
in accordance with IFRS) as a measure of our operating performance, and (b) as an alternative
to any other measure of performance under IFRS. Because not all companies define adjusted
EBITDA, EBITDA, adjusted net income and free cash flow in the same way, these measures may
not be comparable to similarly titled measures used by other companies.
Definitions and explanations of the use of the APMs are described below. Reconciliations of the
APMs to the most directly reconcilable line item are presented on the following pages.
EBITDA
EBITDA is defined as the total net profit before interest, income tax expenses, depreciation and
amortization, foreign exchange gains and losses and income from equity accounted investees.
Adjusted EBITDA
Adjusted EBITDA is defined as EBITDA, adjusted for additional items and costs that management
considers not reflective of our core operations.
Adjusted net income
Adjusted net income is the total net profit, adjusted for additional items and costs that
management considers not reflective of our core operations.
Free cash flow
Free cash flow (FCF) reflects an additional way of viewing our liquidity that we believe is useful to
our investors and is defined as cash flow reflecting the EBITDA for the year, change in working
capital, maintenance capital expenditure, taxes paid, cash interest paid, lease payments,
dividends from equity accounted investees, dividends paid to non-controlling interests and
adjustment for other non-cash items.
Reconciliation of operating profit to adjusted EBITDA
$ million 2020 2019
Operating profit 187.0 105.0
Depreciation & Amortization 592.2 544.7
EBITDA 779.2 649.7
APM adjustments 90.7 98.7
Adjusted EBITDA 869.9 748.4
APM adjustments at EBITDA level
$ million 2020 2019
Natgasoline 65.9 59.8
Unrealized result natural gas hedging (8.6) 4.8
Gain on purchase related to Fertiglobe (13.3) -
Expenses related to expansion projects - 1.4
Hurricane Laura 10.0 -
Mandatory inspection at OCI Nitrogen 7.2 -
Other including provisions 29.5 32.7
Total APM adjustments at EBITDA level 90.7 98.7
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements
Other information
Sustainability
OCI N.V.
Annual Report 2020
197
The main APM adjustments at EBITDA level in 2020 and 2019 relate to:
• Natgasoline is not consolidated and an adjustment of USD 65.9 million was made for OCI’s 50%
share in the plant’s EBITDA in 2020. Natgasoline’s contribution to adjusted EBITDA in 2019 was
USD 59.8 million.
• The unrealized results on natural gas hedge derivatives of USD (8.6) million in 2020 and USD 4.8
million in 2019 relate to hedging activities at OCI Beaumont and in the Netherlands.
• Due to the final post-completion settlement related to Fertiglobe, a gain on purchase of USD
13.3 million was recorded in the income statement.
• OCI Beaumont and Natgasoline were pre-emptively shut down ahead of the arrival of hurricane
Laura in 2020. As a result of the hurricane both entities faced certain additional costs (mainly
related to start-up costs, e.g. incremental gas costs), loss on third party purchases due to
committed sales volumes and estimated lost margins. The resulting total impact of lost methanol
revenues and margin is estimated to be USD 10 million.
• The impact of the mandatory inspection stop due to COVID-19 rescheduling at OCI Nitrogen
resulted in an estimated negative impact on cost absorption based on regular utilization rates
and certain directly allocated costs totaling to USD 7.2 million.
• Other adjustments of USD 29.5 million in 2020 mainly relates to movements in provisions related
to ongoing litigation and claims (USD 32.7 million in 2019 related to Fertiglobe transaction costs,
provisions and the fair value adjustment on inventories as part of the Fertiglobe transaction).
$ million 2020 2019
Reported net profit/(loss) attributable to owners of the
Company
(177.7) (334.7)
Adjustments at EBITDA level 90.7 98.7
Add back: Natgasoline EBITDA adjustment (65.9) (59.8)
Result from associate (change in unrealized gas hedging Natgas) (13.5) 12.0
Accelerated depreciation 2.2 53.6
Derecognition of deferred tax assets - 26.1
Expenses related to refinancing 51.3 9.1
Forex (gain)/loss on USD exposure (108.5) 9.6
Non-controlling interest adjustment / release interest accrual 8.7 (12.9)
Tax effect of adjustments (0.7) (10.1)
Total APM adjustments at net profit/(loss) level (35.7) 126.3
Adjusted net profit/(loss) attributable to owners of the
Company
(213.4) (208.4)
The main APM adjustments at net profit/(loss) level in 2020 and 2019 relate to:
• Result from associate of USD (13.5) million mainly relates to the unrealized results on natural gas
hedge derivatives at Natgas (2019: USD 12.0 million).
• The impact of accelerated depreciation amounts to 2.2 million in 2020 compared to USD 53.6
million in 2019.
• USD 51.3 million expenses related to refinancing activities during 2020 including early
redemption costs, refinancing activities in 2019 amounted to USD 9.1 million.
• USD (108.5) million FX-impact (2019: USD 9.6 million) relates to the foreign exchange gains or
losses on loans and borrowings and related instruments on USD exposure carried at entities
which do not have USD as functional currency.
• Non-controlling interest adjustment is related to the calculated profit attributable to non-
controlling interest on all APM adjustments and the release of the interest accrual totaling to
USD 8.7 million (2019: USD (12.9) million).
• Tax effect of adjustments (USD 0.7 million in 2020) is related to the calculated tax effect of all
APM adjustments.
Free cash flow
$ million 2020 2019
Cash flow from operating activities 617.8 337.5
Maintenance capital expenditure (239.4) (169.8)
Lease payments (37.3) (30.0)
Dividends from equity accounted investees 3.0 1.6
Dividends paid to non-controlling interests (43.2) (6.1)
Other non-current items 3.8 (5.7)
Free cash flow 304.7 127.5
ALTERNATIVE PERFORMANCE
MEASURES (APM
s
) CONTINUED
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements
Other information
Sustainability
OCI N.V.
Annual Report 2020
198
General disclosures
GRI indicator Response
102-1 Name of the organization OCI N.V.
102-2 Activities, brands, products, and services 'Our business', page 5
102-3 Location of headquarters Amsterdam, the Netherlands
102-4 Location of operations 'Our business', page 5
102-5 Ownership and legal form Public limited liability company
102-6 Markets served 'Our business', page 5
102-7 Scale of the organization ‘2020 Performance highlights', page 4
102-8
Information on employees and other workers
‘Our employees’, pages 66-74102-9 Supply chain ‘Our value chain’, page 19
102-10 Significant changes to the organization and
its supply chain
‘CEO letter’, page 7-9
102-11 Precautionary principle or approach We support the precautionary principle by working to reduce our environmental impact as described throughout this annual report
102-12 External initiatives ‘Our approach to Sustainability reporting’, page 39
102-13 Membership of associations In addition to local
memberships at the plant level,
OCI’s memberships include:
102-14 Statement from senior decision-maker 'CEO Letter', page 7-9
102-15 Key impacts, risks, and opportunities 'Strategy and value creation', page 6-19, ‘Industry megatrends’, page 36, ‘Our approach to climate change’, pages 37-38, 'Risk Management', pages 80-86
102-16 Values, principles, standards, and norms of
behavior
'CEO Letter', page 7-9
102-17 Mechanisms for advice and concerns about
ethics
Code of Conduct
, and ‘Compliance’, pages 87-88
GLOBAL REPORTING INITIATIVE (GRI) INDEX
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements
Other information
Sustainability
OCI N.V.
Annual Report 2020
199
GRI indicator Response
102-18 Governance structure See
Corporate governance
and pages 89-118102-19 Delegating authority 'Organizational and corporate structure', page 95 and 'The Board of Directors', page 96
102-20 Executive-level responsibility for economic,
environmental, and social topics
'The Board of Directors', page 96
102-21 Consulting stakeholders on economic,
environmental, and social topics
See 102-40 to 44
102-22 Composition of the highest governance
body and its committees
‘Board profile’, page 91-94
102-23 Chair of the highest governance body 'The Board of Directors', page 96
102-24 Nominating and selecting the highest
governance body
See
Corporate governance
and pages 96102-25 Conflicts of interest Potential or actual conflicts of interest are governed by OCI’s
Articles of Association and By-Laws, and corporate governance policies and procedures.
A Director shall immediately report any conflict of interest or potential conflict of interest that is of material significance and may not take part in any discussion or
decision-making that involves a subject or transaction in relation to which he has a potential conflict of interest with the Company. Personal loans are prohibited in our
Code of Conduct
. OCI complies with provisions 2.7.3 2.7.4, 2.7.5 and 2.7.6 of the Dutch Corporate Governance Code.
102-26 Role of highest governance body in setting
purpose, values, and strategy
‘Board report’, page 95-103
102-27 Collective knowledge of highest governance
body
‘Board report’, page 95-103
102-28 Evaluating the highest governance body’s
performance
‘Board report’, page 95-103
102-29 Identifying and managing economic,
environmental, and social impacts
‘Board report’, page 95-103
102-30 Effectiveness of risk management processes ‘Risk management and compliance’, page 77-88
102-31 Review of economic, environmental, and
social topics
‘Board report’, page 95-103
102-32 Highest governance body’s role in
sustainability reporting
The Board discusses sustainability reporting in Board meetings and HSE & Sustainability Committee meetings. The Board provides input on the annual report and
approves sustainability disclosures ahead of publication.
102-33 Communicating critical concerns ‘Board report’, page 95-103
102-34 Nature and total number of critical concerns OCI deems this to be confidential
102-35 Remuneration policies ‘Remuneration report’, page 104-116
102-36 Process for determining remuneration ‘Remuneration report’, page 104-116
GLOBAL REPORTING INITIATIVE (GRI) INDEX
General disclosures
continued
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements
Other information
Sustainability
OCI N.V.
Annual Report 2020
200
GRI indicator Response
102-37 Stakeholders’ involvement in remuneration Our current Remuneration Policy was approved by shareholders at our 2020 AGM and governs remuneration for both Executive and Non-ExecutiveDirectors. Our
Remuneration Policy is formulated in accordance with the Dutch Civil Code; we have proposed certain amendments to the policy to comply with theShareholder
Rights Directive II, whereby we have developed a Recruitment Policy to guide the remuneration package of newly appointed Executive Directors.
102-38 Annual total compensation ratio ‘Remuneration report’, page 104-116
102-39 Percentage increase in annual total
compensation ratio
‘Remuneration report’, page 104-116
102-40 List of stakeholder groups ‘Stakeholder Engagement’, page 32
102-41 Collective bargaining agreements 'Our employees', pages 66-68
102-42 Identifying and selecting stakeholders ‘Stakeholder Engagement’, page 32
102-43 Approach to stakeholder engagement ‘Stakeholder Engagement’, page 32
102-44 Key topics and concerns raised ‘Stakeholder Engagement’, page 32
102-45 Entities included in the consolidated
financial statements
Note 34 of the financial statements
102-46 Defining report content and topic
Boundaries
‘Material Topics’, page 33
102-47 List of material topics ‘Material Topics’, page 33
102-48 Restatements of information Any exceptions, restatements, or changes to data reported are noted where applicable
102-49 Changes in reporting Any exceptions, restatements, or changes are noted where applicable. Environmental data for 2019 has been restated to include a full year of Fertil and 50% of
Natgasoline. Scope 1 greenhouse gas emissions have been restated to confirm to EU ETS definitions.
102-50 Reporting period Year ended 31 December 2020
102-51 Date of most recent report 2019
102-52 Reporting cycle Annual
102-53 Contact point for questions regarding the
report
102-54 Claims of reporting in accordance with the
GRI Standards
This report has been prepared in accordance with the GRI Standards: Core Option.
102-55 GRI content index Global Reporting Initiative (GRI) Index, pages 199-202
102-56 External assurance OCI engaged an externalclimate change and sustainability consultant to quantify the group’s Scope 3 greenhouse gas emissions and abatement initiatives for Scope
1, 2 and 3. While our non-financial information is not externally assured, it is reviewed and verified by senior leads of relevant functions, including the internal audit
and corporate HSE teams, senior management, and corporate function heads.
GLOBAL REPORTING INITIATIVE (GRI) INDEX
General disclosures
continued
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements
Other information
Sustainability
OCI N.V.
Annual Report 2020
201
Topic-specific disclosures
GRI indicator Response
Economic
201-1 Direct economic value generated and
distributed
‘How we created value for our communities’, page 60-65
201-2 Financial implications and other risks and
opportunities due to climate change
‘Our approach to climate change’, pages 37-58, 'strategy and value creation', page 6-19
Energy
302-1 Energy consumption within the organization ‘Our environment’, page 52
302-3 Energy intensity ‘Our environment’, page 52
Water
303-1 Water withdrawal by source ‘Water and waste’, page 55
303-3 Water recycled and reused ‘Water and waste’, page 55
Emissions
305-1 Direct (Scope 1) GHG emissions ‘Our environment’, page 52
305-2 Energy indirect (Scope 2) GHG emissions ‘Our environment’, page 52
305-4 GHG emissions intensity ‘Our environment’, page 52
305-5 Reduction of GHG emissions 'sustainability strategy' and 'our approach to achieving our targets', pages 39-51
Effluents and waste
306-2 Waste by type and disposal method ‘Water and waste’, page 55
Environmental compliance
307-1 Non-compliance with environmental laws
and regulations
OCI has complied with applicable environmental laws and regulations
GLOBAL REPORTING INITIATIVE (GRI) INDEX
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements
Other information
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Topic-specific disclosures
continued
GRI indicator Response
Employment
401-1 New employee hires and employee turnover ‘Our employees’, pages 66
401-2 Benefits provided to full-time employees that
are not provided to temporary or part-time
employees
‘Our employees’, pages 66-67, note 22 of the financial statements
Occupational health and safety
403-2 Types of injury and rates of injury,
occupational diseases, lost days, and
absenteeism, and number of work-related
fatalities
‘Health and safety', pages 73
Training and education
404-1 Average hours of training per year per
employee
‘Our employees’, pages 68
404-2 Programs for upgrading employee skills and
transition
Comprehensive Development Programs
Diversity and equal opportunity
405-1 Diversity of governance bodies and
employees
‘Our employees’, pages 66, and ‘Board of Directors profile’, pages 91-94, and 99
GLOBAL REPORTING INITIATIVE (GRI) INDEX
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements
Other information
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Category Disclosure Page
Governance (a) Describe the board’s oversight of climate-related risks and opportunities 76
Governance (b) Describe management’s role in assessing and managing climate-related risks and opportunities 76
Strategy (a) Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term 37-38, 41-42
Strategy (b) Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning 37-38, 41-42
Strategy (c) Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario --
Risk Management (a) Describe the organization’s processes for identifying and assessing climate-related risks 37, 40-41, 76
Risk Management (b) Describe the organization’s processes for managing climate-related risks 37, 40-41, 78
Risk Management (c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management 76, 78-79
Metrics and Targets (a) Disclose the metrics used by the organization to assessclimate-related risks and opportunities in line with its strategy and risk management process 38
Metrics and Targets (b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks 39, 207
Metrics and Targets (c) Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets 39-40
TASK FORCE ON CLIMATE-RELATED FINANCIAL
DISCLOSURES (TCFD) INDEX
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Other information
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SUSTAINABILITY ACCOUNTING STANDARDS
BOARD (SASB) INDEX
Sasb Reference Metric Category Unit of measure Page
Environment
GHG gas emissions
RT-CH-110a.1 Gross global Scope 1 emissions, percentage covered under emissions-limiting regulations Quantitative Metric tons (t)
CO
2
e,
Percentage (%)
207
RT-CH-110a.2 Discussion of long-term and short-term strategy or plan to manage Scope 1 emissions,
emissions reduction targets, and an analysis of performance against those targets
Discussion and analysis n/a 40-41
Air quality
RT-CH-120a.1 Air emissions of the following pollutants: (1) NOx (excluding N2O), (2) SOx, (3) volatile organic
compounds (VOCs), and (4) hazardous air pollutants (HAPs)
Quantitative Metric tons (t) 207
Energy management
RT-CH-130a.1 (1) Total energy consumed, (2) percentage grid electricity, (3) percentage renewable,(4)
total self-generated energy
Quantitative Gigajoules (GJ),
Percentage (%)
207
Water management
RT-CH-140a.1 1) Total water withdrawn, (2) total water consumed, percentage of each in regions with High or
Extremely High Baseline Water Stress
Quantitative Thousand cubic
meters (m³),
Percentage (%)
207
RT-CH-140a.2 Number of incidents of non-compliance associated with water quality permits, standards, and
regulations
Quantitative Number 207
RT-CH-140a.3 Description of water management risks and discussion of strategies and practices to mitigate
those risks
Discussion and analysis n/a 53-56
Hazardous waste management
RT-CH-150a.1 Amount of hazardous waste generated, percentage recycled Quantitative Metric tons (t),
Percentage (%)
207
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SASB INDEX
SASB Reference Metric Category Unit of measure Page
Social
Community relations
RT-CH-210a.1 Discussion of engagement processes to manage risks and opportunities associated with community interests Discussion and analysis n/a 32, 60-65, 74
Workforce health & safety
RT-CH-320a.1 (1) Total recordable incident rate (TRIR) and (2) fatality rate for (a) direct employees and (b) contract employees Quantitative Rate 208
RT-CH-320a.2 Description of efforts to assess, monitor, and reduce exposure of employees and contract workers to long-
term (chronic) health risks
Discussion and analysis n/a 70-72
Product design for use-phase efficiency
RT-CH-410a.1 Revenue from products designed for use-phase resource efficiency Quantitative Reporting currency 208
Safety & environmental stewardship of chemicals
RT-CH-410b.1 (1) Percentage of products by revenue that contain Globally Harmonized System of Classification and Labeling
of Chemicals (GHS) Category 1 and 2 Health and Environmental Hazardous Substances, (2) percentage of
such products by revenue that have undergone a hazard assessment
Quantitative Percentage (%) by revenue,
Percentage (%)
208
RT-CH-410b.2 Discussion of strategy to (1) manage chemicals of concern and (2) develop alternatives with reduced human
and/or environmental impact
Discussion and analysis n/a 72
Genetically modified organisms
RT-CH-410c.1 Percentage of products by revenue that contain genetically modified organisms (GMOs) Quantitative Percentage (%) by revenue 208
Operational safety, emergency preparedness & response
RT-CH-540a.1 Process Safety Incidents Count (PSIC), Process Safety Total Incident Rate (PSTIR), and Process Safety
Incident Severity Rate (PSISR)
Quantitative Number, Rate 208
RT-CH-540a.2 Number of transport incidents Quantitative Number 208
Governance
Management of the legal & regulatory environment
RT-CH-530a.1 Discussion of corporate positions related to government regulations and/or policy proposals that address
environmental and social factors affecting the industry
Discussion and analysis n/a 37, 72
Other
Activity metric
RT-CH-000.A Production by reportable segment Quantitative Metric tons (t) 207
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Environmental performance Unit 2019 2020 SASB reference
Energy (Ammonia)
Energy consumption TJ 213,399 212,297
Energy intensity GJ / ton gross production 36.49 37.47
Energy (consolidated)
Energy consumption TJ 290,955 300,142 RT-CH-130a.1
Energy intensity GJ / ton gross production 18.60 18.68
Grid Electricity % NPR 1.7% RT-CH-130a.1
Renewable % NPR 1.5% RT-CH-130a.1
Self-generated energy
% NPR - RT-CH-130a.1
Emissions to air
GHG emissions (Scope 1 - Direct) Million tons of CO
2
e 9.23 9.12 RT-CH-110a.1
GHG emissions (Scope 2) Million tons of CO
2
e 0.60 0.64 RT-CH-110a.1
GHG emissions (Scope 3 - CO
2
to Downstream) Million tons of CO
2
e 4.79 5.11
Total GHG emissions
Million tons of CO
2
e
14.62 14.87
GHG intensity Ton CO
2
e / N-ton 2.30 2.26
Scope 1 emissions covered under emissions limiting regulations % (Scope 1 – Direct) 18.4% 16.4% RT-CH-110a.1
NOx Metric tons 3,037 3,485 RT-CH-120a.1
N
2
O Metric tons 131 150 RT-CH-120a.1
SO
2
Metric tons 135 163 RT-CH-120a.1
VOCs
Metric tons 55 46 RT-CH-120a.1
Effluents and waste
Hazardous waste reused, recycled or recovered Metric tons 1.98 1.69 RT-CH-150a.1
Hazardous waste treated or disposed of Metric tons 1.33 1.61 RT-CH-150a.1
Non-hazardous waste reused, recycled or recovered Metric tons 2.17 2.22
Non-hazardous waste treated or disposed of Metric tons 30.57 44.33
Water*
Total intake by source 90.01
Million cubic meters
88.64RT-CH-140a.1
Groundwater
Million cubic meters 14.84 15.43
Seawater Million cubic meters 49.43 48.00
Surface water Million cubic meters 20.72 20.69
Third party water 3.65 5.89
Total water discharge by destination 47.35
Million cubic meters
52.13RT-CH-140a.1
Groundwater Million cubic meters 2.28 2.17
Seawater Million cubic meters 41.17 37.88
Surface water Million cubic meters 5.01 1.43
Third party water Million cubic meters 3.67 5.87
Water Stress
Water withdrawn in regions with High or Extremely High Baseline Water Stress % 72% 70% RT-CH-140a.1
Water consumed in regions with High or Extremely High Baseline Water Stress % 59% 55% RT-CH-140a.1
Production
Total 6.58
Million tons of ammonia (nutrient tons) and methanol (product tons)
6.36 RT-CH-000.A
ESG PERFORMANCE SUMMARY
TCFD Metrics & Targets (b)
* Excludes seawater used for cooling at FERTIL in a ‘once-through’ system, where seawater intake volumes flow through heat exchangers and are safely discharged uncontaminated back to the sea.
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Other information
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ESG PERFORMANCE SUMMARY
HSE Unit 2019 2020 SASB reference
Safety
Lost Time Injury Rate - total 0.09
Per 200,000 hours worked
0.16
Lost Time Injury Rate - employees Per 200,000 hours worked 0.07 0.06
Lost Time Injury Rate - contractors Per 200,000 hours worked 0.30 0.14
Total Recordable Injury Rate - total 0.23
Per 200,000 hours worked
0.40RT-CH-320a.1
Total Recordable Injury Rate - employees Per 200,000 hours worked 0.34 0.12 RT-CH-320a.1
Total Recordable Injury Rate - contractors Per 200,000 hours worked 0.49 0.42 RT-CH-320a.1
Fatalities # 0 0 RT-CH-320a.1
Process Safety Incidents 21
#
17RT-CH-540a.1
Process Safety Total Incident Rate 0.38
Per 200,000 hours worked
0.32RT-CH-540a.1
Significant Process Safety Incidents count 17 21 RT-CH-540a.1
Major Process Safety Incidents count 0 0 RT-CH-540a.1
Transport incidents # 0 0 RT-CH-540a.2
Environmental incidents
Environmental incidents
# 36 37
Environmental Incident Rate (EIR) Per 200,000 hours worked 0.68 0.66
Water-related permit exceedances* # 12 16 RT-CH-140a.2
Product design for use-phase efficiency
Revenue from products designed for use-phase resource efficiency Reporting Currency NPR $314 million RT-CH-410a.1
Chemical stewardship
Percentage of products by revenue that contain Globally Harmonized System
of Classification and Labeling of Chemicals (GHS) Category 1 and 2 Health and
Environmental Hazardous Substances
% NPR 36.6% RT-CH-410b.1
Percentage of such products by revenue that have undergone a hazard assessment % NPR 100% RT-CH-410b.1
Genetically Modified Organisms (GMOs)
Percentage of products by revenue that contain GMOs % 0% 0% RT-CH-410c.1
* IFCo permit for iron discharge is tightest in industry, a new pipeline was commissioned in 2021 to permanently resolve exceedances
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements
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Working at OCI Unit 2019 2020
Employees*
Total employees
# 3,715 3,682
Full-time # 3,622 3,602
Part-time # 93 80
Engagement and development
Voluntary turnover rate % 1.99% 2.20%
Employee absenteeism % 2.97% 1.89%
Employees covered by Collective Bargaining orUnions % 47.32% 46.14%
Average spending on training and development
$ / employee 1,442 218
Compliance & Governance
Incident notifications # 12 9
Incidents investigated # 12 9
Substantial cases # 0 0
Anonymous notifications via hotline # 3 1
Cybersecurity training (various topics)** # employees reached 1,938 1,921
Compliance training (various topics, incl. CoC, ABC, Debiasing, Data privacy, and others)* # employees reached 973 2,002
Gender
Women 10.51%
%
10.34%Women in technical roles % 1.10% 1.49%
Women non-technical roles % 9.23% 9.02%
Women on the Board of Directors % 16.67% 23.08%
Women in leadership positions % 18.18% 20.24%
Age profile
under 25 % 1.68% 1.90%
25-34 % 21.34% 18.12%
35-44 % 41.82% 42.07%
45-54 % 22.29% 25.07%
55-64 % 12.12% 11.92%
65+ % 0.76% 0.92%
Years of service
0-5 years % 27.26% 21.67%
6-10 years % 25.29% 25.12%
11-20 years % 36.85% 42.78%
21+ years % 10.60% 10.43%
* excl. Natgasoline; 2019 figures restated to include a full year of FERTIL
** excl. Fertiglobe and Natgasoline
ESG PERFORMANCE SUMMARY
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Other information
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ADNOC Abu Dhabi National Oil Company
AGM or GM Annual General Meeting of Shareholders
APM Alternative Performance Measures
AS Ammonium sulphate
BACT Best Available Control Technology
BN Billion
CAN Calcium ammonium nitrate
Capex Capital expenditure
CO
2
Carbon dioxide
CO
2
e Carbon dioxide equivalent
COSO Committee of Sponsoring Organizations of the Treadway Commission
DEF Diesel exhaust fluid
EBIC Egypt Basic Industries Corporation
EBITDA Earnings Before Interest, Taxes, Depreciation and Amortization
EFC
Egyptian Fertilizers Company
EIR
Environmental incident rate
EPS
Earnings per share
ESG Environmental, Social, Governance
FCF Free cash flow
GHG Greenhouse gas
GJ Gigajoule
GRI Global Reporting Initiative
HSE Health, Safety and Environment
ICF Internal Control Framework
IEA International Energy Agency
IFA
International Fertilizer Association
IFRS International Financial Reporting Standards
IPCC Intergovernmental Panel on Climate Change
ISCC International Sustainability & Carbon Certification
LCA Life-cycle analysis
LTI
Lost time injury
LTIR Lost time injury rate
M Million
M m
3
Million cubic meters
MENA Middle East and North Africa
MMBTU Million British thermal unit
MT Million metric tons
N
2
O Nitrous oxide
NF LoR Non-financial Letter of Representation
NOx Nitrogen oxide
OHSAS Occupational Health and Safety Assessment Series
OSHA Occupational Safety and Health Administration
PSI Process safety incident
REACH Registration, Evaluation, Authorization and Restriction of Chemicals
SASB Sustainability Accounting Standards Board
SDG Sustainable Development Goal
SO
²
Sulphur dioxide
STEM Science, Technology, Engineering, and Maths
TCF Task Force on Climate-related Financial Disclosures
TFI The Fertilizer Institute
TJ Terajoule
TRIR Total recordable injury rate
TSR Total shareholder return
UAN Urea ammonium nitrate
UN FAOSTAT United Nations Food and Agriculture Organization Statistics
VPP Voluntary Protection Program
YoY
Year-on-year
Abbreviations
GLOSSARY OF ABBREVIATIONS AND KEY TERMS
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements
Other information
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Biofuel A fuel made from renewable resources
CO
2
equivalents Units to measure greenhouse gas emissions
Environmental Incidents A measure of the number of environmental incidents such as unauthorized product
discharge, leaks, spills, or other potential environmental damage
Greener fuel solutions Products in our portfolio that can be used as greener alternatives to conventional
fuels, including methanol, bio-methanol, diesel exhaust fluid, ammonia, and green
ammonia
Greenfield Newly built asset on an undeveloped site
GHG intensity Greenhouse gas emissions gas emissions divided by total production
Greenhouse Gas Protocol
(GHG Protocol)
A standardized framework from the World Resources Institute for measuring and
managing greenhouse gas emissions
Living wage The minimum income necessary for a worker to meet their basic needs, including
discretionary spending
Lost time injury rate Total lost-time injuries for every 200,000 hours worked
Netback price The price achieved after deducting any applicable transportation costs incurred
Production Capacity Each production unit's maximum proven capacity (MPC), which is calculated as
annualizing the proven production of a production unit's best achieved month. For
new plants, the MPC is the design (also known as nameplate) capacity. For facilities
with more than one interconnected production unit, namely IFCo and OCI Nitrogen,
the Production Capacity of each downstream product cannot all be achieved at the
same time
Scope 1 Direct GHG emissions from our production processes as per the Greenhouse Gas
Protocol
Scope 2 Indirect GHG emissions from steam and electricity import/export as per the
Greenhouse Gas Protocol
Scope 3 Indirect GHG emissions occurring upstream or downstream of our production
processes as per the Greenhouse Gas Protocol
Total recordable injury rate
Total recordable injuries for every 200,000 hours worked
Definitions
GLOSSARY OF ABBREVIATIONS AND KEY TERMS
CONTINUED
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements
Other information
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Share listing
OCI N.V.’s shares have been listed on the Euronext in Amsterdam as of 25 January 2013.
Share capital
The authorized capital of the Company amounts to EUR 12 million. The authorized capital is
divided into 600 million shares, with a nominal value of EUR 0.02 each. OCI’s issued share capital
consists of 210,306,101 ordinary shares. The shares are registered shares. No share certificates
are issued.
As at 31 December 2020, 44.03% of the total shares outstanding were free-float.
Shareholder engagement
We place great importance on maintaining active dialogue with existing and potential
shareholders, banks, and analysts. We are committed to providing relevant, high-quality and
timely information to all stakeholders, and to giving current and potential shareholders, analysts
and financial press broader insight into the Company and the industries in which we operate. We
ensure that relevant information is provided equally and simultaneously to all interested parties as
governed by our shareholder communications policy.
As per our by-laws, we observe a ‘black-out’ period during which analysts’ meetings and
presentations to and/or direct discussions with current or potential shareholders do not take place
shortly before the publication of the regular financial information.
We regularly schedule conference calls and meetings with potential and current equity and debt
investors through roadshow days, conferences and inhouse meetings. In addition to the Investor
Relations director, meetings were conducted by our Executive Chair, CEO and CFO.
We hold results conference calls hosted by our CEO and CFO on the day results are published,
during which investors and analysts are invited to ask questions. A replay option is made available
on our website.
In order to ensure our Board of Directors is fully apprised of shareholders’ areas of focus,
concerns, and feedback, an investor relations update is provided at each Board meeting.
Dividend policy
OCI has a flexible dividend policy designed to balance the availability of funds for dividend
distribution with pursuing growth opportunities, while maintaining, as a priority, its target of 2x net
leverage through the cycle and achieving an investment grade profile.
Accordingly, the Board of Directors has not announced a dividend for FY 2020.
Information in 2020
Number of outstanding ordinary shares as at 31 December 2020 210,306,101
Highest share price (EUR/share) 19.50
Average share price (EUR/share) 12.45
Lowest share price (EUR/share) 8.40
Share price at 31 December 2020 (EUR/share) 15.72
Market capitalization at 31 December 2020 (EUR billion) 3.31
Shareholders
According to the Dutch Financial Supervision Act, shareholders of 3% or more must disclose
their holdings to the Dutch Authority for the Financial Markets (AFM). These disclosures are made
available on the AFM’s public register, which can be found at www.afm.nl
According to the AFM’s register, the following shareholders possessed an interest of 3% or more
as at 31 December 2020:
Contact us
This annual report is available online at www.oci.nl
OCI N.V.
Honthorststraat 19
1071 DC Amsterdam
The Netherlands
OCI N.V. stock symbols: OCI / OCI.NA / OCI.AS
Investor relations contact
Hans Zayed
Investor Relations Director
E-mail: [email protected]
Tel: (+31) 20 723 45 00
investor[email protected]
Corporate & ESG contact
Erika Wakid
Group Corporate Affairs Director
E-mail: [email protected]
Tel: (+44) 020 7297 8820
•
Nassef Sawiris
32.99%
•
Onsi Sawiris
17.36%
•
Samih Sawiris
5.62%
•
W.H. Gates III
6.05%
•
Pictet
3.01%
•
Pelham
3.00%
•
Remaining shares
31.97%
SHAREHOLDER INFORMATION
Business performanceStrategy and value creation Risk management and compliance Corporate governance Financial statements
Other information
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