ANNUAL REPORT
2021
07
CEO Letter
10
Global strategy review
24
How we create value
35 Sustainability strategy
44 Environmental
68 Social
80 Governance
83 Enterprise Risk Management
and Internal Control
85 Risk Management
92 Compliance
125
Consolidated financial statements
132
Notes to the consolidated
financial statements
179
Parent Company financial
statements
185
Notes to the Parent Company
financial statements
199 Independent auditor's report
209 Alternative performance
measures (APMs)
211 GRI Index
215 TCFD Index
216 SASB Index
218 ESG performance summary
221 Glossary of abbreviations and
key terms
222 Shareholder information
95 Co-Chair's introduction
96 Board profile
100 Board report
110 Remuneration report
123 Declarations
25 Business performance
32 Management discussion
and analysis
6.
FINANCIAL
STATEMENTS
5.
CORPORATE
GOVERNANCE
3.
SUSTAINABILITY
REPORT
4.
RISK MANAGEMENT
& COMPLIANCE
2.
BUSINESS
PERFORMANCE
1.
STRATEGY AND
VALUE CREATION
7.
OTHER
INFORMATION
European single electronic reporting format (ESEF) and PDF version
This is the PDF/printed version of OCI N.V.’s 2021 Annual Report. This version has been prepared for ease
of use and does not contain ESEF information as specified in the Regulatory Technical Standards on ESEF
(Delegated Regulation (EU) 2019/815). The official ESEF reporting package is available on our website at
https://www.oci.nl/investor-centre/results-and-presentations/
In case of any discrepancies between this PDF version and the ESEF reporting package, the latter prevails.
OCI N.V.
Annual Report 2021
2
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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 hydrogen products
providing low carbon
fertilizers, fuels, and
feedstock 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 hydrogen products including nitrogen fertilizers, industrial ammonia,
methanol, biofuels, diesel exhaust fluid, melamine, and other products. OCI has more
than 3,850 employees, is headquartered in the Netherlands and listed on Euronext in
Amsterdam.
OCI N.V.
Annual Report 2021
3
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
2021 PERFORMANCE HIGHLIGHTS
Total equity
2020: $2,672M
Earnings/(loss)
per share
2020: $(0.847)
Gross debt
2020: $4,417M
Net debt
2020: $3,730M
Free cash flow
2020: $305M
Adjusted EBITDA
2020: $870M
Adjusted net
income/(loss)
2020: $(213)M
Total assets
2020: $9,097M
$3,508M $2.719
$3,801M
$2,221M $1,594M
$2,527M $732M
$9,812M
Lost time
injury rate
2020: 0.09
Total recordable
injury rate
2020: 0.23
Women at OCI
2020: 10.5%
Compliance
training enrollment
2020: 100%
Occupational
illness rate
2020: 1.9%
GHG intensity*
MT CO
2
e/ton produced
2020: 2.31
Energy intensity
GJ/ton of ammonia
produced
2020: 36.36
Water Intensity
m
3
consumed/ton
produced
2020: 2.50
Employee
turnover rate
2020: 2.2%
0.20 0.35
11.4% 100% 1.7%
2.34
36.05
2.79
2.7%
Revenue
2020: $3,474M
$6,319M
DRIVING BUSINESS VALUE
FINANCIAL ESG
* Please refer to page 48 for a description of how we calculate GHG intensity.
OCI N.V.
Annual Report 2021
4
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
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Sales by product
Hydrogen fuels and feedstocks
3.3MT
Grey and green methanol, DEF, and
green ammonia sold in 2021
•
Other
77%
•
Hydrogen fuels
and feedstock
23%
Our customers
•
Fertilizer use
74%
•
Industrial use
26%
Our employees
3,853
Employees in 2021
•
MENA
70%
•
Europe
19%
•
North
America
11%
•
Ammonia
16%
•
Urea
39%
•
CAN
8%
•
UAN
10%
•
AS
3%
•
Melamine
1%
•
DEF
7%
•
Methanol
16%
14.4MT
Sold in 2021
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, biofuels, 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
2021 PERFORMANCE HIGHLIGHTS
Production assets
Warehousing capacity
Distribution / JVs
Revenue by segment
$6,319M
Revenue in 2021
•
Nitrogen
80%
•
Methanol
20%
Adjusted EBITDA by
segment
$2,527M
Adjusted EBITDA in 2021
•
Nitrogen
80%
•
Methanol
20%
OCI N.V.
Annual Report 2021
5
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
1.
STRATEGY AND
VALUE CREATION
OCI N.V.
Annual Report 2021
7
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
CEO LETTER
Dear stakeholders
2021 has been a transformational year
I am pleased with our excellent results in 2021, as we begin
reaping the rewards of our growth strategy and competitive
business model. We delivered record adjusted EBITDA
of $2.5 billion and, importantly, our free cash flow from
operations was $1.6 billion. We met leverage goals earlier
than we had targeted and are approaching our objective of
an Investment Grade credit rating.
We achieved this with a safety performance well below
industry averages, but our goal remains to prioritize process
safety and to reduce occupational safety incidents to zero
at all our production facilities across the globe.
I am particularly pleased that this performance, together
with a newly designed capital allocation policy gives us the
opportunity to start returning capital to shareholders. At the
same time, we are positioned well for future growth as we
strategically deploy capital for decarbonizing and growing
our asset base in a value-accretive way for the future
hydrogen economy.
We have been very active with a number of corporate
initiatives in the past twelve months. We successfully listed
a 13.8% share in Fertiglobe, our partnership with ADNOC
in the Middle East and North Africa, on the Abu Dhabi
Securities Exchange (ADX) in October. We also created a
new strategic alliance for our methanol business with two
leading investors through the sale of a 15% stake in that
group. On the ESG front, we announced several blue and
green hydrogen activities across our platform.
I would like to thank all our employees for an excellent year
and for their strong commitment to improving and growing
our business. A lot of hard work has gone into bringing us
to this point and I am excited about what our dynamic team
and state-of-the art asset base can accomplish with this
balance sheet and market backdrop.
Health and safety first
After a record safety performance in 2020, we experienced
more incidents year-on-year in 2021 resulting in a lost-
time injury rate (LTIR) of 0.20 and a total recordable injury
rate (TRIR) of 0.35. These numbers are below our internal
targets but reflect a deterioration over 2020.
We are committed to a zero-incident culture and take every
safety in incident seriously. While we are proud that our
safety performance continued to be best-in-class despite
the prevalence and challenges of COVID-19, we regretfully
suffered the first fatality in our history due to a contractor
fall at a jetty. We are deeply saddened by this loss, which is
a very significant example of the importance of preventive
maintenance and of constant vigilance from all employees,
and a full investigation was launched with learnings
implemented across our sites.
While we are proud of every employee’s and contractor’s
diligence and attention to safety, which has brought our
total recordable injury rate down by 58% since 2014, we
do not take a decline in safety performance lightly.
Accordingly, we maintain an awareness program and
refresher sessions for all employees and contractors as
part of our training program. We also reinforce our HSE
standards among contractors, which have historically
consistently suffered more incidents than our employees.
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. In this
we are supported by ongoing support and oversight from
the Board and in the HSE & Sustainability Committee.
Our purpose:
Cultivating a sustainable
world by decarbonizing food,
fuel, and feedstock
A robust capital structure and
new capital allocation policy
During 2021, we redeemed bonds at OCI NV and IFCo for a
total of $1.8 billion and have reduced net debt by $1.5 billion to
c.$2.2 billion, lowered our weighted average cost of debt from
c.4.3% at end 2020 to c.3.2% at end 2021 and, reduced cash
interest by more than $60 million per year from 2022 onwards.
Looking ahead, we will continue to evaluate opportunities to
optimize our capital structure and enhance our recurring free
cash flow conversion.
The Fertiglobe listing was a major event for our capital structure.
It generated gross proceeds to OCI of approximately $461
million. In addition, before the IPO, Fertiglobe paid dividends
of $1,165 million, including an $850 million special dividend,
to its two shareholders. Following the IPO, OCI continues to
own a majority of Fertiglobe’s share capital and will continue to
consolidate it in our results.
The continued improvement in our leverage profile has
translated in upgrades by S&P, Moody’s, and Fitch, resulting in
all ratings are now equalized at BB+ / Ba1 (stable outlook).
Following the transformation in our capital structure during 2021
and the healthy free cash flow generated, we are approaching
our objective to reach an Investment Grade credit rating.
As a result, we are well-positioned to start returning capital to
shareholders, as well as invest in growth opportunities in the
hydrogen energy transition and other opportunities to enhance
and de-risk our future free cash flows.
To that end, OCI’s Board has approved a new dividend / capital
allocation policy, which combines a consistent base return of
capital of $400 million per year, subject to our leverage targets
and policy, with an additional variable component linked to FCF
generated. Distributions will be made twice per year.
Going forward, this new policy is supported by healthy
fundamentals of our core markets, our focus on operational
excellence, our robust balance sheet, and healthy free cash
flows.
OCI advances decarbonization initiatives
As part of the accelerated global shift to clean energy, hydrogen
will play a vital role in the energy transition. Ammonia and
methanol are the most effective carriers of green hydrogen
essential to decarbonizing industry, food, and transport.
I am pleased that we have numerous key initiatives underway
to capture this energy transition potential. Within the past
twelve months we have announced blue and green ammonia
and methanol initiatives across our global asset base. All these
initiatives are at various stages of development and represent
the advantaged locations and characteristics of our asset base
that position us well for the energy transition.
We are also well positioned as a strategic partner with industry
leaders as we are one of the largest producers and traders of
ammonia and methanol globally with a strategically located
asset base, infrastructure, and logistics in place. Moreover, our
facilities are located in areas that are expected to have abundant
low-cost renewable energy sources. These partnerships can
provide entry with relatively low capital expenditure for us
and without taking any major supply or technology risks as
compared to greenfield projects.
CEO LETTER
CONTINUED
INVESTMENT HIGHLIGHTS
Global leader in nitrogen and methanol
with excellent diversication
•
Net Ammonia 15%
•
Urea 34%
•
CAN 10%
•
UAN 16%
•
Methanol 18%
•
Melamine 1%
•
DEF 6%
16.2 million metric tons per year
of production capacity
Favourable position on the cost curve with
state-of-the-art asset base
17%
>40yrs
30-40yrs
20-30yrs 0-10yrs
10-20yrs
8%
14%
9%
52%
Youngest asset
base relative
to global peers
with 33% of
production
capacity under
5 years old
Asset base by vintage
Highly strategic locations allow for enhanced
netback pricing through a coordinated global
commercial strategy
•
North America 35%
•
Europe 24%
•
MENA 41%
Capacity by region
OCI N.V.
Annual Report 2021
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Strategy and
value creation
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Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Looking ahead
Looking ahead into 2022, we are highly concerned and
saddened by the humanitarian crisis currently unfolding from
the Russia – Ukraine conflict. As a leading producer and
distributor of essential nitrogen fertilizers, our global team is
working to run our world-scale assets and utilize global supply
chain to the fullest to ensure the availability of our nitrogen
fertilizers to support crop yields and help address critical grain
shortfalls.
We are not today directly impacted by the conflict or related
sanctions yet future effects are uncertain and we are closely
monitoring the extreme volatility, uncertainty and indirect impacts
as they arise. We believe our diversified product mix, low-cost
global platform, world-scale young assets, strong logistics and
our unique ammonia infrastructure can help us mitigate volatile
feedstock and product prices, as demonstrated during the high
gas price environment in Europe in the second half of 2021.
Demand for our industrial nitrogen products is strong. The
ammonia market is structurally tightening over the medium term
with limited net capacity additions and higher industrial demand.
Melamine markets have continued to tighten driven by strong
demand from home renovation and construction markets, tight
supply, and low global inventories across the supply chain.
The recovery in truck sales and freight activity has continued,
supporting an improving trend for OCI’s Diesel Exhaust Fluid
sales in the US for 2022.
Methanol market fundamentals remain positive. Prices have
been supported by a continued recovery in demand, low global
inventories, and higher oil and derivatives prices whereas there
is no new supply expected to come onstream in 2022.
We see large upside from additional demand for our products
emerging in a range of new applications and sectors as a result
of the hydrogen transition, where ammonia and methanol are
ideally positioned. We continue to make good progress in our
efforts to capture value creative opportunities from emerging
demand for clean ammonia and methanol as we aim to become
one of the largest producers of hydrogen fuel and feedstock in
the world.
We can leverage our competitive global platform, world-scale
young assets and strong logistics platform and harmonize our
hydrogen strategy with our relentless focus on shareholder value.
This all will continue to support FCF generation together
with our focus on operational excellence and further gross
debt reduction.
Ahmed El-Hoshy
Chief Executive Officer
CEO LETTER
CONTINUED
OCI N.V.
Annual Report 2021
9
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
9.7BN
Global population
by 2050
+70%
Required growth
in food production levels
by 2050
-55%
Reduction in arable land
per capita by 2050
+50%
Increase in meat
production by 2050
-55%
Required reduction in
GHG emissions by 2030
+300X
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
Our commitment to drive the decarbonization of food, fuel, and feedstock is steered by a differentiated strategy
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 improve upon 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 maintain a global approach to
our commercial strategy.
We 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.
We believe our diversified product
portfolio, advantageous geographic
presence, and coordinated global
commercial strategy enable us to
maximize netback prices, which
coupled with our ramped-up
production capacity, 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 by
decarbonizing food, fuel,
and feedstock.
Our end-markets cover food, fuel, and feedstock, representing an
opportunity to decarbonize approximately 90% of today’s global
greenhouse gas emissions:
• 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
1
Additional EBITDA from
operational excellence expected
in the next 3-5 years
-20%
GHG intensity reduction
by 2030
25%
Women in senior
leadership by 2025
<2X
Maintain net leverage
through the cycle
OUR STRATEGIC PRIORITIES
OUR
TARGETS
1
The $75 million estimated additional EBITDA was based on selling price levels of early 2021, and would be substantially higher when applying March 2022 prices.
OCI N.V.
Annual Report 2021
10Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
CAPITAL ALLOCATION PRIORITIES
Committed to a consistent base
distribution and a variable component
linked to free cash flow to shareholders
Having achieved our net leverage goals in 2021, we are now in a position
to balance the availability of funds and excess free cash flows to return
capital to shareholders while pursuing value accretive ESG and other growth
opportunities.
The Board of Directors has therefore approved a new capital returns policy
(see page 222) that combines consistent base dividend of $400 million per
year distributed on a semi-annual basis, with a variable component linked to
the generation of free cash flow.
The variable component can be in the form of repayments of capital,
dividends or share buybacks and is based on surplus free cash flows after
providing for growth capex and base dividends with the aim to provide
investors with cyclical upside.
Going forward, the policy is subject to maintaining an investment grade credit
profile with a target of net leverage below 2x through the cycle, and balance
availability of funds and excess FCF for profit distribution to shareholders
while pursuing value accretive ESG and other growth opportunities.
2017 2018 2019 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021
Leverage targets achieved
Deleveraging despite trough pricing conditions
Accelerated deleveraging in 2021
7.0x
4.4x 5.4x
4.3x
3.0x
2.1x 1.7x
0.87x
Net debt
Net debt / adj. EBITDA
Net Debt
1
(US$ m)
Free Cash Flow (FCF) defined as cash from operations less maintenance capex less lease payments less dividends to minorities
1
Capital returns to shareholders Invest in growth
Base dividend of $400 million
(paid semi-annually)
Invest in value accretive ESG
and other growth opportunities
variable component linked to FCF generation
To grow future FCF potential
Strong balance sheet
Maintain as priority, target of
<2x net leverage
through the cycle
Supporting strong FCF and an investment grade profile
Balanced deployment of capital
OCI N.V.
Annual Report 2021
11Strategy and
value creation
Sustainability
Corporate
governance
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performance
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and compliance
Financial
statements
Other
information
CAPITALIZING ON THE
HYDROGEN OPPORTUNITY
OCI is building a sustainable company
for the future that drives the global
transition to a hydrogen economy.
In a decarbonized world by 2030, hydrogen demand could
grow up to tenfold, supported by drop in production costs and
regulatory push to address climate change.
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
NextGenerationEU (EU’s €808bn post-COVID recovery
fund)
aims to make EU economy greener and more resilient.
EU has committed €37bn of funding
to promote Green H
2
in
Southern Mediterranean (including Egypt and Algeria) between
2021- 2027.
US passed $1.2tn Infrastructure Bill
which includes incentives
for hydrogen and CCS projects, and is considering the
Build
Back Better Bill
, which includes additional GHG reduction and
hydrogen incentives (e.g., $3/kg green hydrogen tax credit).
Japan aims
to build a “hydrogen society” by 2030 and achieve
carbon neutrality by 2050.
India's government to require
refiners and fertilizers to use
green hydrogen from 2023, paving the way for a major
acceleration in the nation's hydrogen economy
.
Several governments announced hydrogen subsidies and
grant programs
, such as
Germany’s H2Global initiative for green hydrogen imports
, consisting of a €2bn strategy to
support electrolyzer projects abroad.
Supportive regulatory environment
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.
Growth in hydrogen demand driven key OCI sectors
1
2020 2030 2040
2050
Existing feedstock uses
New feedstock (CCU, DRI)
Industry energy
Building heating and power
Transportation
Power generation,
buffering
10x green H
2
2015
EJ
8
10
14
28
78
9
22
11
16
9
10
OCI’s hydrogen strategy
OCI N.V.
Annual Report 2021
12Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
CAPITALIZING ON THE
HYDROGEN OPPORTUNITY
CONTINUED
Our two core 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
-252 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 90% 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 leading hydrogen carriers capable of decarbonizing our key sectors
As hydrogen carriers, ammonia and
methanol can decarbonize approximately
90% of today’s greenhouse gas emissions
across our end markets of agriculture,
fuel, and feedstock, in addition to indirect
markets in power and and waste.
Global GHG
emissions Blue / Green ammonia Bio / Green methanol
Agriculture
20%
• Enabler for low carbon farming
Fuel
10%
• No CO
2
, SOx, 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
• Versatile base chemicals with established routes to gasoline and aviation
fuels
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
OCI’s hydrogen strategy
OCI N.V.
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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. This push to decarbonize shipping
is driven throughout the industry’s value chain,
with major consumer facing companies,
including Amazon, Ikea, Inditex and Unilever, pledging to decarbonize their freight
by moving cargo on ships using zero-carbon fuels by 2040
.
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 water electrolysis and
air separation that can both be powered by energy produced from solar and wind without
emitting any carbon This makes a green ammonia fueled ship a zero-emission ship. Similarly,
as blue and green methanol are derived from renewable sources and utilize biogenic CO
2
in its makeup, a vessel powered by methanol, or a methanol derived fuel is net-zero-
emissions ship.
OCI is working with a variety of partners to encourage the growth low carbon fuels in
shipping, from developing a network of supply points, procedures for safe operations, and
industry certification; to fostering partnerships with players, such as MAN Energy Solutions,
Eastern Pacific Shipping and Hartmann Group, to build and operate methanol and ammonia
fueled vessels.
The maritime fuel market in HFO could 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.
MARINE FUEL REPRESENTS A SUBSTANTIAL
MARKET OPPORTUNITY FOR OCI
1
2
Lower end when burned in more efficient fuel cells, higher end of the range when burned in
internal combustion engines.
Ammonia and methanol are
the only practical alternatives
for long-distance shipping.
Sorfert is ~1 day sailing
from Gibraltar, a major
bunkering hub
OCI production plants
Major bunkering hubs (Houston,
Rotterdam, Fujairah, Singapore)
Container ship capacity deployed (width
relative to size
EBIC and EFC are
next to the Suez Canal
which represents ~12%
of global trade
OCI’s network located at key bunkering hubs on major shipping lanes
2050 outlook potential for ammonia and methanol in marine fuels industry as a substitute for HFO
1,2
2020 ammonia
production
2050 HFO ammonia
equivalent
2020 methanol
production
2050 HFO
methanol equivalent
Merchant trade
Captive use
4 – 5x
750 - 900
22
>35x
merchant
ammonia traded
volumes
6 – 7x
750 - 900
103
182
OCI’s hydrogen strategy
OCI N.V.
Annual Report 2021
14Strategy and
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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 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, including 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 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
OCI’s hydrogen strategy
OCI N.V.
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Key Highlights:
OCI FUELS PLATFORM EXECUTING ON
GROWTH AMBITIONS IN HYDROGEN FUELS
OCI Fuels is executing on growth
ambitions to become the premier
hydrogen-based clean fuel
provider globally
OCI’s hydrogen strategy
OCI production plants
OCI future green bunker location
Major container trade routes
Singapore
Singapore and other Asian
positions being monitored closely
to round out bunker network
Suez and Port Said
• Ideal proximity of production facilities
• Competitive production and supply costs
• Highest density of cargo and trade flow,
with 12% of global trade passing through
Suez canal
• Idle time conversion
• Egypt positioned as the global leader in
green fuels supply
Port of Rotterdam
• Production facilities in The Netherlands
• Largest methanol storage position in ARA
with positions at two terminals
• Biofuels blending operation to service our
EU Fuels markets
Houston and Port of Los Angeles
• Production facilities in Texas and largest bunker
market in USA
• Fed by large-scale low carbon methanol
production and complimented by green gasoline
facility
• Growing support for establishing port on West
Coast
• Local biofuels market catching up to Europe and
California to support local demand
Gibraltar
Sorfert is located at
1 day of sailing from
Gibraltar
Established in 2015, OCI Fuels is the first commercial
platform to provide customers with no and low-carbon
hydrogen-based fuel products.
It produces a variety of no and low-carbon methanol products
to help customers lower emissions and comply with regulatory
targets. It can produce green methanol, Bio-MTBE, blue
ammonia, green ammonia and an alcohol mix consisting of
green methanol and ethanol blends.
As one of the largest buyers of renewable natural gas, OCI
Fuels can scale up production as needed with more than 3.3m
tons of capacity for green methanol.
OCI Fuels currently supplies 3% of the UK vehicle fuels market
and is a major supplier to several key EU markets through
various partnerships with with some of the world's largest
brands and oil majors.
OCI’s global network benefits from on-site or nearby bunkering
1
#1 green methanol
producer in the US
and in Europe
All green methanol meets the
highest sustainability standards,
certified by ISCC EU
and ISCC Plus.
Global scale with logistics,
distribution and storage infrastructure
in place through
OCI’s bunkering platform.
OCI N.V.
Annual Report 2021
16Strategy and
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SUCCESSFUL FERTIGLOBE IPO
MARKS ANOTHER MILESTONE
Established in 2019 as a strategic partnership between OCI and ADNOC, Fertiglobe is the world’s largest
seaborne exporter of urea and ammonia combined, the largest producer of nitrogen fertilizers by product
capacity in the MENA region and an early mover in clean ammonia. The company has four world class assets
in strategic locations which benefit from an advantaged, fixed low-cost feedstock position and represent one
of the youngest asset bases in the industry.
Our strategy in action
50%
36.2%
13.8%
Free float on
Headquartered
in Abu Dhabi
4 world-class
strategically located
production facilities
50%
of assets younger
than 10 years
In-house global
distribut
ion capabilities
including ~1Mt storage
capacity
6.7mtpa sellable volume capacity
• 5.1mtpa
urea production capacity
• 4.5mtpa
gross ammonia production capacity
• 0.5mtpa
DEF production capacity
1
Early mover in
clean ammonia
Logistics allowing for excellent freight and
transport advantaged, duty-free delivery
to East and West
OCI, ADNOC and Fertiglobe
announced their intention to
proceed with an initial public
offering (IPO) of Fertiglobe and
to list its shares for trading
on the Abu Dhabi Securities
Exchange (ADX).
5 October
13 October
Announced the price range of AED
2.45-2.65 per share and cornerstone
investment agreements with Inclusive
Capital Partners, Abu Dhabi Pension Fund
and GIC (c. $231m combined investment).
20 October
Successfully completed the bookbuilding process at the price
of AED 2.55 per share, with strong interest from international,
regional and local investors resulting in the offering being 22x
oversubscribed with demand exceeding $17.4bn. The final offering
size was confirmed at 13.8% of Fertiglobe’s total issued share
capital, leaving OCI with 50% + 1 share and ADNOC with 36.2%
ownership. OCI will continue therefore to consolidate Fertiglobe.
27 October
Fertiglobe started trading on ADX at a market
capitalization of $5.8bn, thus becoming
the third largest IPO ever on the Abu Dhabi
Securities Exchange and the first free zone
company to list onshore in the UAE.
IPO timeline
Fertiglobe’s listing is another milestone in the company’s
journey to unlock its potential, providing the right visibility
and positioning to grow as a pure play low-cost nitrogen
fertilizer and clean ammonia export platform, as well as a
regional ESG champion.
Fertiglobe’s strategic approach as an enabler of global food
security and the hydrogen economy through its growing
clean ammonia platform focuses on three key areas:
•
Delivering high returns from optimizing the current
platform to generate more volumes at a low cost through
the operational excellence program.
•
Increasing revenues and netbacks by organic
commercial growth and looking at opportunistic external
opportunities in a fragmented fertilizer market.
•
Being an early mover in the clean ammonia space to
leverage our unique advantages, scaling up incrementally
and through partnerships as demand develops.
1
Maximum downstream capacities cannot be achieved at the same time. DEF production
capacity not included in the 6.7mtpa sellable volume capacity.
OCI N.V.
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Fertiglobe has a significant competitive advantage when it comes to building low
carbon ammonia capacity in comparison to other greenfield projects.
The company is ready to benefit from the blue ammonia opportunity with practically
all critical necessary pieces in place. ADNOC and OCI offer complimentary platforms
and will facilitate Fertiglobe in its transition: for example, ADNOC will help with carbon
sequestration, while OCI contributes with its downstream infrastructure globally.
Fertiglobe is also well-positioned to produce green ammonia with access to abundant
low-cost solar and wind energy at its locations and existing ammonia infrastructure.
Unlike greenfield projects, Fertiglobe can access blue / green market opportunities with
limited capital expenditures, with an electrolyzer as the only major element missing in its
current value chain.
SUCCESSFUL FERTIGLOBE IPO MARKS
ANOTHER MILESTONE
CONTINUED
Our strategy in action
Blue Ammonia
Green Ammonia
Abundant low cost solar
and wind energy in
Egypt, UAE and Algeria
CO2
sequestration
network
Fertiglobe competitive advantage,
accessed through low CAPEX
Electrolyzer
Only missing piece for
Fertiglobe’s value chain
Ammonia
plant
Merchant
Ammonia
position
+
Ammonia
storage
+
Loading
+
Vessels
Ammonia
import
infrastructure
Strategic export
and bunkering
locations
Potential offtake
agreement
Access to OCI
Rotterdam and
Beaumont, TX
✔ ✔ ✔✔
OCI N.V.
Annual Report 2021
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STRATEGIC METHANOL ALLIANCE
TO CREATE A GLOBAL HYDROGEN
FUEL POWERHOUSE
85%
15%
OCI Methanol
~3.3Mt
1
of total current
owned capacity
#2
in US
#1
in Europe
Global production
sole producer with facilities in
both the USA and EU leading
to enhanced netbacks
Global distribution,
with extensive import /
export infra with network to reach the EU, US
and Asia and
centralized commercial,
with experienced senior traders in methanol and
petrochemicals
Leader in
Hydrogen Fuels
Hydrogen advantage
with methanol ideally positioned to capitalize
on the H
2
economy as a H
2
liquid carrier
On 22 November, we announced that the OCI Methanol Group, which comprises OCI Beaumont, BioMCN, our 50%
stake in Natgasoline, OCI Methanol Marketing, and OCI Fuels, will be incorporated in the Abu Dhabi General Markets
(ADGM) as a unified platform. From there, it will be uniquely positioned to cater to demand growth for methanol as a
fuel and other low-carbon applications, as well as serve as the launchpad for new ESG-focused growth opportunities.
The incorporation in Abu Dhabi is key to provide direct access to our established Western markets and it further
enables us to focus on high growth markets for methanol applications in Asia.
Moreover, it allowed two leading Abu Dhabi strategic investors, Alpha Dhabi Holding and ADQ, to invest in a 15% stake
in the OCI Methanol Group for a total consideration of $375 million. The transaction closed in Q1 2022.
Alpha Dhabi Holding and ADQ are valued partners who will bring significant strategic opportunities and are fully
aligned with our ambitions to develop the OCI Methanol Group into a leading hydrogen fuels producer and distributor,
building on our current strategic advantages as the only producer with facilities and extensive distribution and storage
capabilities in the United States and Europe, which are located near major inland demand centers or on major global
shipping lanes next to key bunkering hubs.
The strategic platform will focus on low-carbon methanol as a fuel for the future with hydrogen as the primary
feedstock. OCI Methanol Group has been a pioneer in developing low-carbon methanol, supplying it to blue chip
customers. Methanol is a key enabler of the hydrogen economy and one of the most logical hydrogen fuels. It will be
key to decarbonizing the marine industry, and the strategic alliance enables OCI Methanol to drive and accelerate the
transition to a hydrogen economy.
With methanol as the leading low-carbon fuel for the
shipping industry and other applications, we believe
we are best positioned to capitalize on the growing
demand for hydrogen in downstream markets
1
Includes 50% of Natgasoline capacity and 365ktpa of ammonia capacity at OCI Beaumont.
Our strategy in action
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Strategic investment projects
NUMEROUS KEY INITIATIVES UNDERWAY
TO CAPTURE THE TRANSITION POTENTIAL
Strategic partnerships with industry leaders on announced
projects in all key regions and lower carbon projects being
evaluated or developed across our global asset base.
•
Fertiglobe joined TA’ZIZ as partner in a new 1 mtpa world-
scale blue ammonia project in Abu Dhabi. FID expected in
2022, targeted start-up in 2025.
•
Fertiglobe partnered with Scatec, the Sovereign Fund of
Egypt, Plug Power and Orascom Construction for a 100 MW
electrolyzer to produce ~90 ktpa of green ammonia at our
Egyptian site, targeting start-up in 2022.
•
In 2021, Fertiglobe piloted blue ammonia production at
Fertil with first shipments to Japan at a premium price in
partnership with ADNOC. Debottlenecking is underway to
produce up to 70 ktpa blue ammonia by 2024.
•
Fertiglobe is considering a green ammonia project at Fertil
with 100 MW electrolyzer in partnership with Masdar/Engie.
Selected case studies:
•
Blue ammonia project in Abu Dhabi, UAE
•
At OCI Nitrogen, CO
2
emissions from the ammonia
production process to be captured and stored under the
North Sea through CCS project at OCIN with ~485 ktpa CO
2
abatement potential.
•
In partnership with RWE, OCI Nitrogen is a strategic off-
taker of green and circular hydrogen from FUREC Waste-
to-Hydrogen project based on gasification of mixed waste,
resulting in 90 ktpa of low-carbon ammonia production and
~150ktpa net CO
2
abatement.
•
BioMCN has become strategic off-taker of multiple green
hydrogen projects in the Netherlands including Nouryon
(20MW to be scaled to 60 MW) and RWE (50 MW
electrolyzer with direct connection to RWE's Westereems
wind farm).
•
Development of ammonia bunkering opportunity, partnering
with the Port of Rotterdam and with MAGPIE consortium.
Selected case studies:
•
Project FUREC
•
OCI Beaumont began producing blue ammonia using low
carbon hydrogen in 2021, scalable up to its full ammonia
production capacity of 365 ktpa.
•
CCS project at IFCo to capture and store CO
2
produced
on-site, backed by BlackRock’s GEPIF III and commercially
anchored by Valero. In November 2021 we announced
a partnership with Navigator, which will provide CO
2
transportation and storage services.
Selected case studies:
•
IFCo CCS
•
OCIB Blue Ammonia
MENA Europe
US
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Strategic investment projects
CASE STUDIES:
SELECTED MENA AND EU PROJECTS
Key Highlights:
•
Fertiglobe is partnering with ADNOC and ADQ to build the first world-scale blue
ammonia facility in the MENA region, with a capacity of up to 1 mtpa.
•
The project will be in TA’ZIZ, a new industrial ecosystem that is part of a planned
$45bn investment in the Ruwais Industrial Complex in Abu Dhabi.
•
Ruwais Industrial Complex will supply attractive hydrogen and nitrogen
feedstock.
•
Limited upfront capex requirement given over-the-fence feedstock and utilities
and given strategic partnership with ADNOC and ADQ.
•
Preliminary analysis indicates mid-double digit annual capex investment.
•
Shareholders are considering several funding options, including non-recourse
project financing to reduce shareholders’ equity contribution.
•
Final investment decision is expected in 2022, while start is expected in 2025.
Blue Ammonia
(NH
3
)
ADNOC
industrial gases
Nitrogen (N
2
)
Polyethylene
Ethylene
(C
2
H
4
)
Methane (CH
4
)
CCS/CCU
Haber
Bosch
Cracker
Potential Applications:
• CO
2
for ADNOC (EOR)
• Storage in ground
Ethane (C
2
H
6
)
ADNOC
Scope
Blue H2
CO
2
Key Highlights:
•
RWE is developing project FUREC, which aims to produce circular hydrogen
by gasifying residual waste streams, such as municipal waste, at the Chemelot
chemical complex in The Netherlands, where OCI Nitrogen is located.
•
OCI Nitrogen currently produces grey ammonia using natural gas as feedstock.
The facility can introduce circular hydrogen from FUREC in its processes to
replace 20% of current natural gas consumption.
•
FUREC is sustainable:
2
reduction of ~150KTPA by reducing natural gas consumption at
Chemelot by more than 200 million m
3
per year (scope 1 emission).
materials (circularity).
•
Minimal capital expenditures required for OCI
•
RWE aims to make a final investment decision in late 2022/early 2023, with a
target date to be operational late 2025
Circular hydrogen
production
Manufacturing
Consumption
Residues
Recycling and
pellet production
OCI N.V.
Annual Report 2021
21Strategy and
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CASE STUDIES:
SELECTED US PROJECTS
Strategic investment projects
Key Highlights:
•
The project allows IFCo to capture and store CO
2
produced on-site, generating
significant benefits through government tax credits, environmental attributes and
premiums for lower-carbon downstream products (e.g., blue ammonia).
•
The project is backed by BlackRock’s Global Energy & Power Infrastructure
Fund III, which invests in essential, long-term infrastructure assets, and is
commercially anchored by Valero.
•
IFCo would only be responsible for installing the carbon capture equipment on
its site, while a third party would collect the CO
2
from a custody transfer point
and deliver it via pipeline to a central sequestration hub.
•
IFCo entered into an agreement with Navigator CO
2
Ventures LLC to provide
CO
2
transportation and storage services on its CCS system, the Heartland
Greenway, for up to 1,130,000 metric tons of CO
2
per year, equivalent to the
carbon emissions of ~245,000 vehicles driven annually.
•
The project will have two phases: a first phase focused on process gas,
representing c. 500,000 metric tons of CO
2
per year, and a second phase for
the balance, subject to regulatory enhancements of the 45Q program to make
installation of the required post-combustion capture equipment economically
feasible.
•
Start of operations for the first phase is expected at the end of 2024.
IFCo carbon capture and storage (CCS)
OCIB blue ammonia
Key Highlights:
•
At OCI Beaumont we have developed a path to produce low-CI (Blue) Ammonia
through our partnerships with upstream suppliers which established an end-to-end
program to sequester carbon emissions from hydrogen production.
•
OCI agreed to purchase this low-CI hydrogen which is then used in our facility as
feedstock for ammonia production.
•
OCI developed its own proprietary Blue Ammonia (BlueAm) standard, with the
support of SCS Consulting, that targets a 60% GHG reduction to current industry
benchmark of GHG emissions for ammonia production.
•
The BlueAm standard is first of its kind and is annually audited, providing a reliable
and transparent standard certification of the lower production emission footprint of
the Blue Ammonia molecules.
•
The blue ammonia produced at OCI’s Beaumont facility has the potential to prevent
up to 550,000 metric tons of CO
2
from being emitted into the atmosphere, which will
play a vital role in de-carbonizing the world and specifically in hard-to-abate sectors.
IFCo
Navigator’s
heartland
greenway
Independent Auditor – Annual Certification Process
Low Carbon (Blue) Hydrogen
• Carbon capture/utilization in
hydrogen production process.
• Mass balance of low-CI
hydrogen recived from thrid-
party H
2
suppliers.
Low Carbon (Blue) Ammonia
• Utilizes low-CI hydrogen
feedstock.
• State-of-the-art, low
emissions prodction process.
Certifed Blue Ammonia
• 60% GHG emission
reduction.
• Product certificate
delivered upon sale.
OCI N.V.
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OPERATIONAL
EXCELLENCE
Optimizing our asset reliability
and energy efficiency
•
average, can achieve better (1) gas-
conversion (2) higher on-stream times, and
(3) needs 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:
first quartile of the global cost curve, with
sustainably low levels of capex
cost advantage is increasing
WELL POSITIONED FOR
MARKET UPSIDES
Attractive market fundamentals
•
positive and we believe our industries will
benefit from attractive supply-demand
fundamentals and steepening cost curve
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,
while balancing with our commitment to
deleverage
•
strategy, please refer to the sustainability
section beginning page 35
DRIVING OUR
STRATEGY FORWARD
We are focused on delivering our nancial, operational, commercial,
and decarbonization strategies
Driver of improving
FCF generation
Driver of improving
FCF generation
Strong supply/demand
fundamentals
OCI N.V.
Annual Report 2021
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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
$9.8BN
Assets
$3.5BN
Equity
$6.32BN
Revenue
$2.53M
Adj. EBITDA
9
production sites
16.2mt
production capacity
1,741
rail tank cars
11
direct access to
major waterways
2.2mt
storage capacity
57
countries reached
For our communities:
Educational and social programs specifically
tailored to meet each community’s needs
(p 73-75)
For our customers:
Efficient nitrogen products optimizing
agricultural productivity (p 64)
Hydrogen fuels that significantly reduce GHG
emissions versus conventional fuels
(p 57-60)
For our employees:
Top quartile compensation in all of our
locations, with average annual compensation
of $100 thousand per employee
Improving diversity with 24% of senior
leadership positions held by women in 2021
For our investors:
Competitive returns with a consistent dividend
policy, and a proven track record of value
creation
For the world:
Helping optimize crop yields to feed the world
(p 70-71)
Improving energy efficiency and reducing GHG
intensity through our operational excellence
program and a differentiated decarbonization
strategy that enables the hydrogen transition
(p 12-26, p 51-64)
284TJ
Energy consumed
88M m
3
Water withdrawn
2.34 GHG
Intensity
4.83mt CO
2
e
Recycled
42M m
3
Water discharged
0.20 LTIR
0.35 TRIR
3,853
Employees
100%
Compliance training
enrollment
11.4% women at OCI
2.7% turnover rate
Natural gas or hydrogen
Hydrogen fuels
and feedstock
Production
Storage
Sustainable agriculture
Providing hydrogen fuels and 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 totaled $1.3 billion in 2021. 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 4,800
suppliers each year.
a b c
a b c
4
ammonia
vessels
4
barges
OCI N.V.
Annual Report 2021
24Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
2.
BUSINESS
PERFORMANCE
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BUSINESS PERFORMANCE
Industry leading safety performance
0.35
1.20
IFA (2020)
OCI
OCI’s capacity growth 2008 – 2021 (mtpa)
2008 2010 2012 2015 2021
16.2
Strategic
priorities Delivering our strategy Our priorities
Contribution
to SDGs
1
OPERATIONAL
EXCELLENCE
•
Completed major turnarounds
at Natgasoline and IFCo, and minor maintenance turnarounds
at Fertil and Sorfert, following which we achieved high and steady utilization rates.
•
Focus on enhancing asset reliability and energy efficiency
through our global operational
excellence program, achieving c. 2.8% and 0.8% average improvement year-on-year,
respectively.
– With all the initiatives taken in 2021, including changes in the leadership of 6 Sites and the
recruitment of senior specialists for the Global Manufacturing Team, management is confident
that significant improvements will be achieved in the next two years
•
Strengthened our HSE leadership team
by hiring experienced HSE directors for both OCI and
Fertiglobe.
•
Operational excellence:
continue to implement our groupwide operational excellence program as
described on pages 52-53.
•
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
Total Recordable Injury Rate
OCI N.V.
Annual Report 2021
26Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
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statements
Other
information
BUSINESS PERFO
RMANCE
CONTINUED
Strategic
priorities Delivering our strategy Our priorities
Contribution
to SDGs
2
BUSINESS
OPTIMIZATION
•
Building our low/no carbon methanol platform
- Entered into agreements with MAN Energy Solutions, Hartmann Group and Eastern Pacific Shipping
to create
marine value chain and start commercialization by 2023/2024 of ammonia and methanol as shipping fuels.
OCI intends to charter ammonia vessels built, owned and operated by Hartmann with ammonia engines
designed by MAN. Additionally, OCI plans to charter the first retrofitted methanol fueled vessel operated by
EPS using already-in-service MAN engines and technology in the next two years.
- Strategic methanol alliance to create a global hydrogen fuel powerhouse,
with incorporation of OCI’s methanol
platform in the Abu Dhabi General Markets (ADGM) and 15% stake investment from two leading Abu Dhabi
strategic investors, Alpha Dhabi Holding and ADQ. The strategic platform will focus on low-carbon methanol
as a fuel for the future with hydrogen as the primary feedstock.
• Developing lower carbon projects globally to drive the hydrogen economy
- Fertiglobe is partnering with ADNOC and ADQ to build the first world-scale blue ammonia facility in the MENA
region,
with a capacity of up to 1 mtpa.
- Fertiglobe is partnering with Scatec, the Sovereign Fund of Egypt and Orascom Construction for a 100 MW
electrolyzer
to produce 90,000 metric tons of green ammonia at EBIC in Egypt.
- CCS project at OCIN
with ~485 ktpa CO
2
abatement potential.
- FUREC Waste-to-Hydrogen project at OCIN
in partnership with RWE to purchase green and circular hydrogen
from mixed waste gasification.
- Project at OCIB
to produce blue ammonia up to 365 ktpa capacity.
- CCS project at IFCo
to capture and store CO
2
produced on-site, backed by BlackRock’s GEPIF III and
commercially anchored by Valero.
• Listing of Fertiglobe on ADX in October 2021
as another milestone in the company’s journey to unlock its
potential, providing the right visibility and positioning to grow as a pure play low-cost nitrogen fertilizer and clean
ammonia export platform, as well as a regional ESG champion.
•
Continue to capitalize on the
hydrogen opportunity by growing
our low/no carbon ammonia and
methanol platforms,
leveraging our
unique positioning in terms of geographic
presence and product mix, with strategic
partnerships and development projects.
•
Continue to evaluate strategic
opportunities
to deliver value to
stakeholders.
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OCI N.V.
Annual Report 2021
27Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
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BUSINESS PERFO
RMANCE
CONTINUED
Sorfert to USA:
~18 days at sea
China to USA:
~35 days
at sea
Centralized commercial strategy has environmental advantages
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
Our centralized commercial and
strategically location logistics and
distribution allows us to optimize our
shipments to minimize time at sea,
which helps reduce CO
2
emissions
wherever possible.
Strategic
priorities Delivering our strategy Our priorities
Contribution
to SDGs
3
GLOBAL
COMMERCIAL
STRATEGY
•
Further strengthened our commercial organization to help ensure progress on commercial
excellence
with the appointment of a VP − Commercial Nitrogen, and aligned key regional positions to optimize
product sales and coordination across the group.
•
Continued to increase our downstream market engagement to enhance supply chain value capture
through:
-
Initiatives to improve customer experience and increase our product offering.
-
Increased logistics investments to expand our presence in the Port of Rotterdam, add ammonia vessels, and
optimize our global storage capacity.
-
Grew our platform’s physical presence by establishing new strategically positioned offices and distribution
partnerships in Latin America and Asia.
-
Continued to grow our third-party trading capabilities in key markets and products both directly and through
downstream marketing partnerships and swaps in Australia, South Africa, Europe, and the United States.
This allows us to increase market share and negotiating power with freight providers, with a view to ultimately
deliver better netbacks.
•
Implemented several low-carbon initiatives
to grow our product offering while mitigating our scope 3 profile
and driving the energy transition through ammonia and methanol.
-
Investigating urease and nitrification inhibitors through multiple partnerships and studies.
-
Developed proprietary
market first, low carbon BlueAm (blue ammonia) certification standard
at OCI Beaumont that targets a 60% GHG reduction to current industry benchmark of GHG emissions for ammonia production.
•
Grew our methanol platform’s market reach in hydrogen fuels
to become a major supplier of methanol
fuel blends to several key EU markets, and in particular the UK where we supply 3% of the UK vehicle fuels
market.
•
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.
OCI N.V.
Annual Report 2021
28Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Strategic
priorities Delivering our strategy Our priorities
Contribution
to SDGs
4
SUSTAINABILITY
•
Announced several initiatives and partnerships to drive the decarbonization of food, fuel and
feedstock.
As described on pages 10-24, we are working across our locations to develop no/low carbon
ammonia and methanol, which are the key products to enable the transition of a hydrogen economy.
•
Conducted a thorough review of the calculation methodologies per operating company for our
historical environmental data
in preparation for the launch of a limited assurance process with our
external auditor in the near future. Some discrepancies were corrected resulting in revised 2019 and 2020
and environmental data, which have accordingly been restated in this annual report. Please refer to page 48
for details.
•
Strengthened our sustainability function
by hiring a VP of Sustainability.
•
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 35.
40
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•
Hydrogen fuels and
feedstocks: 23%
•
Other products: 77%
3.3 MT of methanol, bio-methanol, DEF, and green
ammonia sold in 2021
1.3% reduction in GHG intensity vs.
baseline
2019 2020
2.37
2.34
BUSINESS PERFO
RMANCE
CONTINUED
2.31
2021
OCI N.V.
Annual Report 2021
29Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Strategic
priorities Delivering our strategy Our priorities
Contribution
to SDGs
5
FREE CASH
FLOWS
•
Demonstrated commitment to financial discipline and deleveraging:
- Redemption of 5.875% c. $147.2m IFCo bonds.
- Partial redemption of 10% of OCI NV 5.25% Senior Secured Notes due 2024 and 10% of OCI NV 4.625%
Senior Secured Notes due 2025,
or a total redemption of $60m and $40m respectively of the aggregate
principal amounts of the Notes.
- Conditional notice of redemption of $540m 5.25% Senior Secured Notes due 2024.
- Conditional notice of redemption of €400m of OCI NV 3.125% €700m Senior Secured Notes due 2024.
- Conditional notice of redemption of €300m 3.125% Senior Secured Notes due 2024, of 10% of 3.625%
Senior Secured Notes due 2025 and 10% of 4.625% Senior Secured Notes due 2025. Separately, IFCo
exercised the option to redeem the remaining balance of $40m on IFCo bonds.
•
Announced semi-annual interim distribution for H2 2021 of €1.45 per share, or c. $350 million.
•
New capital structure and dividend policy for Fertiglobe,
with a $1.1bn bridge financing, of which $250m
was used to refinance existing debt at Fertiglobe and EFC, and the remaining $850m to pay a special dividend
to its two shareholders. Additionally, a new 5-year $300m RCF has been put in place.
-
This structure helps OCI to optimize its balance sheet further, cash interest and supports future growth
opportunities in clean ammonia and other decarbonization initiatives for OCI as a whole and Fertiglobe.
- Fertiglobe has adopted a semi-annual dividend distribution policy,
with H1 dividend of the financial year paid
out in October of that year and the H2 dividend paid out in April of the following calendar year.
•
Achieved free cash flows of $1.6 billion in FY 2021
on improved EBITDA, working capital, and lower
financing costs.
•
As a result, deleveraged by $1.5 billion
to end the year with net debt of $2.22 billion compared to $3.73
billion on 31 December 2020.
•
New dividend
and capital allocation
policy.
•
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.
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BUSINESS PERFO
RMANCE
CONTINUED
2020
2021
2021 2022 2023 2024 2025 2026-2037
Weighted average group debt maturity extended
6 months from 4.7 years to 5.2 years
1,726
1,308
168
613
540
195
215
1,169
1,030
608
461
OCI N.V.
Annual Report 2021
30Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
BUSINESS PERFO
RMANCE
CONTINUED
CASE STUDY:
As a result of high natural gas prices in Europe, we made the strategic decision to temporarily
shut down an ammonia line at OCI Nitrogen and instead use our ammonia import terminal in
Rotterdam, OTE, to import ammonia from Fertiglobe, OCI Beaumont and third parties.
This was more economical and allowed us to continue to operate the remaining plants at OCI
Nitrogen to maximize our downstream production and netbacks. By doing so, we were able
to weather volatility in natural gas pricing and help agricultural markets by addressing product
shortages and food security concerns as many competitors do not have the infrastructure
and global reach that we have to increase ammonia imports and continue to supply both our
industrial and agricultural customers.
We also continued to enhance our ammonia logistics with the addition of a dedicated fourth
charter vessel, and increased our throughput capabilities at OTE by an annualized rate of
c. 300kt, further strengthening our world leading ammonia production and trading platform.
OTE ammonia import
terminal in Rotterdam
Cooperation by entire
OCI ammonia team
across Europe, the USA, and Fertiglobe, our
chartering team
,
OTE team, BioMCN the
team legal team
and
.
Able to weather volatility in natural gas pricing
and continue to operate the remaining plants at
OCI Nitrogen to
maximize our downstream
production and netbacks
− we have the flexibility
to redirect tons from the East to the West to capture
higher pricing and optimize on netbacks.
Achieved
record ammonia imports at OTE of
128KT in Q4 ‘21
(vs. average of 58KT for Q4 ‘18-
20) and strong sales volumes out of OCI Nitrogen.
Able to
maintain OCI Nitrogen’s supply
obligations to customers
and helped agricultural
markets by
addressing product shortages and
food security concerns.
Implemented further improvements to our ammonia
logistics: (1)
Chartered a fourth vessel,
utilizing global relationships; (2)
Expanding OTE’s throughput.
OCI N.V.
Annual Report 2021
31Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
MANAGEMENT DISCUSSION
AND ANALYSIS
$ million 2020 2021
Revenue 3,474.1
6,318.7
Adjusted EBITDA 869.8
2,526.5
Adjusted EBITDA margin 25.0%
40.0%
Adj. net profit / (loss) attributable to owners
of the Company
(213.4)
731.8
Net profit / (loss) attributable to owners
of the Company
(177.7)
570.5
Basic earnings per share (0.847)
2.719
Operating profit as reported 187.0
1,562.8
Depreciation, amortization and impairment (592.2)
(891.6)
EBITDA
779.2
2,454.4
EBITDA margin 22.4%
38.8%
2021 performance drivers
Revenue
•
Sales volumes:
own product sales volumes were lower at 11.4 million metric tons for FY 2021, compared to 12.2
million metric tons in 2020. Lower own-produced nitrogen product volumes (-6%) were largely due to turnarounds
at Fertiglobe and the shutdown of one ammonia line at OCI Nitrogen, partially offset by growth in ammonia volumes
at Fertiglobe, and DEF volumes in the US. Own-produced methanol sales volumes declined (-9%) due to a planned
turnaround at Natgasoline and no production from BioMCN, which has been shutdown due to the high gas price
environment in Europe. Traded third party volumes increased instead by 21% compared to 2020.
•
Selling prices:
selling prices improved year-on-year for all products, which helped offsetting the negative impact
of significantly higher gas prices. In Europe, higher gas prices resulted in a negative impact of c. $147 million in Q4
2021 versus Q4 2020; in the US the net negative impact of gas prices amounted to c. $37 million.
Adjusted
EBITDA
1
•
Adjusted EBITDA increased by 190% versus 2020, while reported EBITDA increased by 215%.
•
The nitrogen and methanol segments benefited from higher selling prices, offsetting lower sales volumes and higher
gas prices in Europe and the US.
Operating
profit
Operating profit increased by 736% to $1,562.8 million in FY 2021 versus FY 2020, primarily as a result of:
•
Gross profit increased by $1,416.9 million due to a $2,844.6 million increase in revenue, partially offset by a
$1,427.7 million increase in cost of good sold (mainly driven by increased gas prices).
•
Selling, general and administrative expenses increased by $47.1 million compared to 2020, as well as depreciation,
amortization and impairment which increased by $299.4 million (mainly due to the full impairment of BioMCN).
Financing
costs
•
Finance income decreased by $177.9 million compared to the previous year.
•
Finance cost decreased by $103.6 million to $308.8 million versus 2020, due to a $77.1 million decrease in foreign
exchange loss and a $26.5 million decrease in interest expense on financial liabilities following the Company's
deleveraging and refinancing efforts.
•
The foreign exchange gains and losses mainly relate to external financing and to the revaluation of intercompany
balances in foreign currencies.
Adjusted
net profit /
(loss)
•
Adjusted Net profit / (loss) attributable to the owners of the Company was a profit of $731.8 million in 2021,
compared to a loss of $213.4 million in 2020.
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 209 - 210 of this report.
•
Methanol US: 12%
•
Methanol Europe: 8%
•
Nitrogen US: 12%
•
Nitrogen Europe: 19%
• Fertiglobe: 49%
Revenue
by segment:
•
Methanol US: 14%
•
Methanol Europe: 6%
•
Nitrogen US: 13%
•
Nitrogen Europe: 8%
• Fertiglobe: 59%
Adj. EBITDA
by segment:
OCI N.V.
Annual Report 2021
32Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
MANAGEMENT DISCUSSION
AND ANALYSIS
CONTINUED
Condensed consolidated statement of cash flows
for the years ended 31 December
$ million 2020 2021
Cash and cash equivalents at 1 January
600.5
686.3
Cash flows from operating activities 617.8
2,264.1
Cash flows used in investing activities (260.2)
(243.5)
Cash flows used in financing activities (244.9)
(1,495.0)
Net cash flows 112.7
525.6
Currency translation adjustments (26.9)
(14.6)
Cash and cash equivalents in statement
of financial position 686.3
1,580.3
Bank overdraft repayable on demand
-
(383.0)
Cash and cash equivalents in statement of
cash flows 686.3
1,197.3
Net debt as at 31 December
$ million 2020 2021
Long-term interest-bearing debt 4,226.9
3,290.2
Short-term interest-bearing debt 189.7
510.6
Gross interest-bearing debt 4,416.6
3,800.8
Cash and cash equivalents (686.3)
(1,580.3)
Net debt 3,730.3
2,220.5
Outlook
The outlook for our end markets is positive for 2022, supported by attractive
farm economics for nitrogen fertilizers, strong demand in our industrial end
markets for ammonia, methanol, melamine and DEF and our advantaged
feedstock costs in MENA and the US. OCI generated significant free cash
flow from operations (before IPO proceeds) of $1.6 billion during the full year
2021 and we achieved our net leverage goals. Going forward, our focus is on
returning capital to shareholders and growing our future cash flows through
targeted investments in hydrogen and other growth opportunities.
Recent market events resulting from the Russia-Ukraine conflict have
tightened nitrogen markets further. Russia and Ukraine supply 18% of global
corn and 28% of global wheat exports, and reductions in grain exports from
the regions mean that it could take at least until 2024 to replenish grain stocks
to ease food security concerns. Farmer affordability has improved in grain
exporting regions and farmers are incentivized to apply nitrogen to maximize
yields. Both countries also contributed to 25% of global ammonia trade,
15% of global urea trade and 6% of global methanol trade in 2021 tightening
supply and demand dynamics further.
2021 performance drivers
Cash
flows from
operating
activities
•
Cash flows from operations primarily reflect the change in net profit in 2021 compared to 2020, and changes in
working capital.
•
Net profit was $1,158.8 million in 2021 compared to a net loss of $94.1 million in 2020, an improvement of
$1,252.9 million.
•
Working capital inflows of $70.9 million compared to $139.6 million in 2020, an improvement of $68.7 million.
Cash
flows from
investing
activities
•
Cash flows used in investing activities were $16.7 million lower than 2020, primarily due to a decrease in
capital expenditures.
•
Total cash capital expenditures were $247.8 million in 2021 compared to $262.6 million in 2020, of which
maintenance capital expenditure was $225.4 million and $239.4 million, respectively.
Cash
flows from
financing
activities
•
Proceeds from borrowings in 2021 totaled $2,248.3 million, which consisted of the proceeds of new financing
arrangements at Fertiglobe and changes in the outstanding amounts of revolving credit facilities.
•
During 2021, we redeemed bonds at OCI NV and IFCo for a total of $1.8 billion and have reduced net debt by
$1.5 billion to $2.2 billion, lowered our weighted average cost of debt from c.4.3% at end 2020 to c.3.2% at end
2021 and reduced cash interest by more than $60 million per year from 2022 onwards.
•
Repayments of borrowings were $3,186.1 million in 2021, mainly related to the above refinancing and
amortization of debt and changes in the outstanding amounts of revolving credit facilities.
Free cash
flow
1
•
Free cash flow before growth capital expenditure amounted to $1,593.9 million in 2021 reflecting the reported
EBITDA for the year, working capital inflows, maintenance capital expenditure, and cash interest paid of $204.9
million. An increase of $ 1,289.2 compared to 2020 mainly driven by the increased EBITDA during 2021.
Gross debt
•
Gross interest-bearing debt decreased by $615.8 million due to the debt repayments, refinancing, and positive
impact of exchange differences on Euro denominated debt.
Cash
& cash
equivalents
•
As a result of a positive free cash flow, cash and cash equivalents increased to $1,580.3 million.
Net debt
• Net debt stood at $2,220.5 million as of 31 December 2021, from $3,730.3 million as of 31 December 2020.
• The trailing net debt / adjusted EBITDA was 0.9x as of 31 December 2021 (0.7x pro-forma for Methanol
transaction) compared to 4.3x at the same time last year.
1
OCI N.V. uses Alternative Performance Measures (APM) to provide a better understanding of the underlying developments of the performance of the business.
The APMs are not defined in IFRS and should be used as supplementary information in conjunction with the most directly comparable IFRS measures. The
definition of the APM and a detailed reconciliation between the APM and the most directly comparable IFRS measure can be found on
pages 209 - 210 of this report.
OCI N.V.
Annual Report 2021
33Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
'000 metric tons 2020 2021 % Δ
Own product
Ammonia 1,656.8
2,090.3
26%Urea 4,763.2
4,327.6
(9%)Calcium
Ammonium
Nitrate (CAN) 1,371.8
1,176.4
(14%)Urea Ammonium
Nitrate (UAN) 1,749.9
1,354.8
(23%)Total fertilizer 9,541.7
8,949.0
(6%)Melamine 144.6
131.9
(9%)DEF 636.2
612.1
(4%)Total Nitrogen
products 10,322.5
9,692.9
(6%)Methanol
1
1,926.5
1,747.2
(9%)Total own
product sold 12,249.0
11,440.1
(7%)Traded
third party
Ammonia 284.3
255.5
(10%)Urea 910.5
1,295.2
42%UAN 41.3
48.5
18%Methanol 258.8
524.4
103%Ammonium
Sulphate (AS) 712.8
467.8
(34%)DEF 227.0
362.2
60%Total traded
third party 2,434.7
2,953.6
21%Total own
product and
traded third
party 14,683.7
14,393.7
2%$ million 2021 market review Market outlook
Nitrogen
•
Nitrogen prices recovered significantly in 2021
compared to 2020 on the back of a structural shift
to a multi-year demand driven environment for
nitrogen products over the medium term.
•
Ammonia prices in 2021 were supported by
recovery in global industrial consumption, higher
feedstock prices and a structural tightening of
markets as no new supply came online in the
market. A strong US fall ammonia season lowering
inventories ahead of the spring season, higher
demand from downstream phosphates production
and a number of planned and unplanned outages
also provided additional support for pricing in 2021.
•
Global nitrogen market fundamentals are supportive in 2022 given robust demand for
nitrogen in all our key markets on improved farm economics and high grain prices, with
strong support for corn above $5/bushel to the end of 2024. This is supported by low
grain inventory levels and stocks-to-use ratios globally, which need at least two years
to replenish, amplifying the need for nitrogen fertilizers application to ease food security
concerns.
•
Urea export bans by the Chinese government are limiting their participation in the global
market at least until H2 2022, with China implementing mandatory requirements for
summer stocking and tighter environmental restrictions.
•
Over the medium-term, the nitrogen market is expected to remain tight with projected
new urea capacities below the level seen over the past five years, below projected
demand growth and are slow to ramp up.
•
The ammonia market is structurally tightening over the medium term with incremental
demand expected to exceed new supply by 3 Mtpa, without accounting for the
medium-term low-carbon ammonia demand in new applications we expect towards
middle of the decade.
Methanol
•
Methanol prices in 2021 recovered significantly
following trough market conditions in 2020 on
the back of a strong rebound in global industrial
activity as economies eased Covid restrictions. A
recovery in oil prices was supportive of traditional
demand for methanol derivatives and demand in
every major sector grew in 2021. Prices also saw
support from poor global operating rates in the
form of above-average planned and unplanned
outages as well as delayed startups of new supply.
•
2022 has started off with strong methanol prices on high energy pricing and seasonal
supply curtailments.
•
Operating rates are expected to improve in 2022 as new supply reaches stable
operations, but no significant new supply will start up in 2022, and demand growth is
expected to outpace capacity growth.
•
Long-term industry fundamentals remain positive, with incremental demand expected
to exceed new supply by ~8mtpa through 2026, without accounting for the additional
upside from hydrogen fuel demand, notably marine fuels.
Natural
Gas
•
In 2021, global gas prices increased due to cold
weather directly impacting demand especially
across Asia and Europe and creating strong
competition for LNG supply. Additionally, the drop
in Russian gas flows to Europe accentuated the
tightness with TTF reaching new highs.
•
This drove up our marginal costs of production in
Europe but also supported selling prices for all our
products. This strengthened Fertiglobe’s significant
competitive advantage as a result of its attractive
gas supply agreements but also our US assets
given the widening gas differentials between the US
and Europe and Asia.
•
Globally, feedstock prices are expected to reset at higher levels, with natural gas futures
in Europe pointing to c.$26 / mmBtu for 2022 and c.$15/mmBtu for 2023-2024 on the
back of tighter fundamentals and higher demand for gas.
•
Higher marginal feedstock costs are providing support to markets and selling prices
over the medium-term.
MANAGEMENT DISCUSSION
AND ANALYSIS
CONTINUED
1
Including OCI’s 50% share of Natgasoline volumes
OCI N.V.
Annual Report 2021
34Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
3.
SUSTAINABILITY
REPORT
OCI 2021 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.
60%
GHG savings when
green methanol is used
as fuel vs gasoline
89%
• 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
72%
Seawater intake
in high water
stress regions
55%
Lower NOx emissions
than global average
25%
Female
Executive Directors
19%
Diversity &
Inclusion (D&I)
SOCIAL
Female employees in
US & EU segments
23%
Female
Board Members
24%
Female representation
in senior leadership
in 2021
100%
Employees enrolled in our
compliance framework
training program
100%
Robust
governance
and reporting
framework
encourages best
practices across
GOVERNANCE
Whistleblowing reports
investigated
37%
Employees covered
by collective bargaining
or unions
C-Suite
Executive Directors
are responsible for
compliance
Committed
to 20% GHG
intensity
reduction by
2030 and carbon
neutrality by
2050
Committed
to 25%
female senior
2025
Committed
to 100%
compliance
training annually
• Committed to fostering an inclusive culture with a diverse
workforce, where every person is recognized, valued, and thrives
• Groupwide multi-year D&I program aims to translate our
commitment into action, allowing us to firmly anchor an inclusive
culture in every aspect of our business
• 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
OCI N.V.
Annual Report 2021
36Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
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. We follow the recommendations
from the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB),
the Task Force on Climate-Related Financial Disclosures (TCFD), the EU Directive for Non-
Financial Reporting (NFRD), and the EU Taxonomy. 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 214.
Report boundaries
This report covers the fiscal year ended 31 December 2021, 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.
OCI N.V.
Annual Report 2021
37Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
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.
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, employee representation
bodies
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
OCI N.V.
Annual Report 2021
38Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
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.
We play an active role in leadership positions in key associations, such as holding board seats
or steering memberships. This allows us to have a meaningful role in promoting sustainable
practices, steering the strategic priorities of our industries, and driving decarbonization objectives.
We also support several other organizations to promote sustainable practices across our
industries and value chains.
Our dedicated global public affairs team supports OCI’s businesses in Europe and North America,
monitoring evolving regulatory landscapes.
INDUSTRY AND SUSTAINABILITY
PARTNERSHIPS
RT-CH-210a.1
OCI is an active member of IFA
with Ahmed El-Hoshy, CEO of OCI
and Fertiglobe, on the IFA Board
of Directors. We participate in and
contribute to the agendas of multiple
committees such as Sustainability,
Science and Agronomy, and
Communications. Through IFA, we
supported the development of the
Ammonia Technology Roadmap, in
collaboration with the International
Energy Agency in 2021, and are
supporting the development of
roadmaps to reducing emissions of
fertilizer use in 2022.
OCI is an active member of VNCI (the
Dutch Chemical Association) Advocacy
Team and specific working groups on
advocacy, sustainability, climate and
energy. In 2021, we contributed to a
comprehensive study “From Roadmap
to Reality”, describing the necessary
steps and required conditions that
are needed to realize a circular and
climate neutral chemical industry in the
Netherlands by 2050.
We engage with Fertilizer Europe on a wide range
of advocacy efforts related to the EU’s Fit for 55,
Taxonomy, and Common Agriculture Policy.
We are working with Fertilizer Europe, Ammonia
Energy Association, and the Methanol Institute
to develop the first global standards for low-
carbon ammonia and methanol, as standardized
certification is critical to support the uptake of
these sustainable products downstream.
We also hold Board positions at several
organizations, such as Fertilizers Europe and the
Methanol Institute.
In 2021, we became a member of
the Cool Farm Alliance to promote
the adoption of sustainable farming
practices and products.
In January 2022, we joined the
Hydrogen Council as a Steering
Member to play an active role in the
development of the global hydrogen
economy and promote hydrogen as
the fuel and feedstock of the future.
OCI N.V.
Annual Report 2021
39Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
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 Climate change action
3 Energy efficiency and asset reliability
4 Local economic development
5 Food security
6 Human capital and D&I
7 Ethics and integrity
8
Water stewardship and
waste management
9
Sustainable technology
OUR MATERIAL TOPICS
We take a holistic double
materiality approach to identifying
and defining our material topics
Financial 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
Sustainable Materiality
High
High
• Stakeholder
engagement with:
• Global megatrends
• Industry challenges
• Internal risk
management
• Research reports
• Peer reports
9
OCI N.V.
Annual Report 2021
40Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
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.
100%
Top quartile
compensation at all
locations
3,853
Employees in 2021
14.4MT
Nitrogen fertilizers
sold in 2021
0.35
TRIR performance
is 71% better than
peers per IFA
#1
Global green
methanol producer
3MT
Hydrogen fuels and
feedstock sold in 2021
(grey and green methanol,
DEF, green ammonia)
105K
Our digital resources
reached over 105
thousand users in 2021
44%
Lower CAN CO
2
footprint than the
European average
2.34
GHG intensity
in 2021
2.79
Water consumption
intensity in 2021
Driving decarbonization with a focus on sustainable
value creation and contributing to the UN Sustainable
Development Goals (SDGs)
OCI N.V.
Annual Report 2021
41Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
ESG RATINGS
We aim to provide stakeholders with comprehensive,
accurate, and transparent ESG disclosures. We have
been rated by various ESG ratings agencies based on the
extent of our ESG disclosures, and where possible work
to address perceived reporting gaps.
Ratings agency
Rating scale
(worst to best)
2021 rating 2020 rating
MSCI ESG Ratings CCC to AAA BBB B
Sustainalytics 100 (severe risk) to 0
(low risk)
26.7 42.1
CDP Climate D- to A B N/A
CDP Water D- to A B N/A
Vigeo Eiris 0 to 100 52 37
ISS ESG
Corporate Rating
D- to A+ C- D
OCI N.V.
Annual Report 2021
42Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
EU TAXONOMY
The European Commission has established the EU Taxonomy as an enabler to scale up
sustainable investments and make the EU carbon neutral by 2050. To define what is ‘sustainable’,
the European Commission has developed a catalog of economic activities, each with criteria
to determine if they substantially contribute towards a sustainable economy – known as the
EU Taxonomy. Companies across diverse sectors, supply chains, and asset classes must
use this classification system to assess if their business activities are sustainable according to
the Taxonomy. In June 2021, the Commission formally adopted the Climate Delegated Act,
establishing the criteria defining which activities substantially contribute to the first two, out of
six, environmental objectives of the Taxonomy regulation, namely climate change mitigation and
climate change adaptation. The remaining four have been planned to be added in 2022.
For FY2021, we have disclosed eligibility on the first two environmental objectives (climate
change mitigation and climate change adaptation), being the proportion of Taxonomy eligible
and Taxonomy non-eligible economic activities in our total turnover, capital expenditures (capex)
and operating expenditures (opex). The next step will be to ensure that we meet the technical
screening criteria associated with each Taxonomy-eligible activity, the ‘do no significant harm’
(DNSH) criteria and the minimum social safeguards. As the EU requirements for reporting on
Taxonomy-aligned activities come into force in January 2023, we will disclose this in our 2022
Annual Report.
The current available definitions as included in the EU Taxonomy are broadly formulated which
leads to companies having to interpret how this applies to its business activities and the impact
thereof on eligibility. To our knowledge and understanding, we applied judgment, interpretations
and assumptions based on current available information to date. Future guidance could result in
more accurate definitions and other decision-making in meeting reporting obligations that may
come into force, which could impact future EU Taxonomy reporting.
Taxonomy Eligibility
To determine taxonomy eligibility, we first identified the activities relevant to OCI as defined by the
Taxonomy delegated acts by conducting a review of all products, facilities, and investments. We
determined that our activities are categorized under activity 3.15 – Manufacture of anhydrous
ammonia.
The manufacture of methanol, blends, and melamine was assessed and does not fall under the
EU Taxonomy’s description of activities and has therefore been deemed taxonomy non-eligible.
We assessed the taxonomy eligibility of our turnover based on total revenue as defined and
reported in the Consolidated Financial Statements, note 27. Taxonomy-eligible revenue accounted
for 20% of total revenue in 2021 ($ 6,318.7 million).
Taxonomy eligible capital expenditures is defined as additions to property, plant and equipment,
intangible assets and right-of-use assets. This accounted for 19% of the total capital expenditures
reported in the Consolidated Financial Statements, note 7 ($ 268.5 million).
Taxonomy-eligible operating expenses is defined as direct non-capitalised costs that relate to
research and development, building renovation measures, short-term leases, maintenance and
repair, and any other direct expenditures relating to day-to-day servicing of assets of property,
plant and equipment. This accounted for 19% of total operating expenses, reported
as maintenance and repair expenses and short-term leases in the Consolidated Financial
Statements. As our current financial reporting system set-up does not accommodate reporting
against the specific OPEX categories of the EU Taxonomy, the information required to report
is currently not readily available. Therefore, please note that for 2021 we have only included
maintenance and repair and short-term leases OPEX for the purposes of this EU Taxonomy
disclosure, as only these categories currently are readily extractable from our financial
reporting system.
2021 turnover, capital expenditures
and operating expenses Turnover Capex Opex
Taxonomy-Eligible Activities (%) 20% 19% 19%
Taxonomy-Non-Eligible Activities (%) 80% 81% 81%
OCI N.V.
Annual Report 2021
43Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
3.
SUSTAINABILITY
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
OCI N.V.
Annual Report 2021
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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. Accordingly, the effect of climate-related risks do not have
a material impact on accounts and disclosures, including judgments and estimates in the financial statements. We also consider
SASB Chemicals Sustainability Accounting Standards along with TCFD recommendations when assessing our climate-related
risks. Please refer to pages 82-93 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 and technology development risk to transition to lower
emissions technologies
•
Risk of strategic projects not receiving adequate regulatory support or not capturing
operational and nancial benets and synergies
•
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 47-49.
•
Green products:
we are growing our hydrogen fuel and feedstock solutions portfolio to
accelerate our path to decarbonization, as described on pages 54-59.
•
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 62-65.
•
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
to maximize soil health and feeding the crops that are the favoured by global dietary shifts,
described on pages 60 and 66.
•
Digital solutions:
our digital applications help farmers monitor weather patterns to optimize their activity planning and calculate optimal nutrition application, as described on
page 67.
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
OCI N.V.
Annual Report 2021
46Strategy and
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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 hydrogen 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. 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 grey and green
methanol, and DEF are important contributors to the development of hydrogen 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,
the elimination of transport emissions, and the potential to decarbonize nearly 90% of global
emissions in the future as we shift towards blue and green ammonia and methanol production.
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 hydrogen fuels portfolio.
Our environmental targets to reduce our scope 1 and 2 greenhouse gas emissions
intensity by 20% by 2030 underscores our commitment to reduce our climate impact
throughout our value chain. 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
To limit global warming, the world needs to rapidly reduce
annual emissions. OCI’s focus markets need to contribute
to these emission reductions
OCI N.V.
Annual Report 2021
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Scope 3 Scope 1 Scope 2 Scope 3
2019 Baseline
4.7 M metric tons of CO
2
e 9.5 M tonnes
of CO
2
e
0.6 M tonnes
of CO
2
e
23.3 M metric tons of CO
2
e
Emissions
category
Production and
transportation of
purchased third
party products
Purchase and
transportation
of natural gas,
other fuels, and
raw materials
Production Purchased fuel
and electricity
use
Use of products sold,
primarily nitrogen fertilizers
OCI
activities
Upstream/downstream activities
not in OCI’s control
SUSTAINABILITY STRATEGY
OCI’s Baseline 2019 GHG emissions
Our groupwide target is to reduce our Scope 1 and 2 greenhouse gas (GHG) emissions by 20%
by 2030 and aim to achieve carbon neutrality by 2050. This target brings us close to aligning to
the 2°C pathway, and we exploring joining the Science Based Target Initiative (SBTi) in the next
few years to move 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 and
includes 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.
During the year, we conducted a comprehensive review of the calculation methodologies for our
environmental data per operating company. This review was in preparation for the launch of a
limited assurance process with our external auditor in the near future. Some discrepancies were
corrected resulting in revised 2019 and 2020 environmental data, which have accordingly been
restated in this annual report.
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 accurately reflects the
nitrogen content of our production portfolio, eliminates the possibility of double counting
downstream products (i.e.: produced using ammonia, such as urea, CAN, UAN, etc.) and
normalizes for annual fluctuations in our product mix.
TCFD Metrics & Targets (a) (c)
~61%
of total
emissions
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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
1
of annual incremental EBITDA. This is
further described on pages 52-53.
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
• Green 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
he $75 million estimated additional EBITDA was based on selling price levels of early 2021, and would be substantially higher when applying March 2022 prices.
2
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.
2.37
1.89
-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
2
.
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.
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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
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.
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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 (2
nd
& 3
rd
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
Producing enhanced fertilizers:
• Working on incorporating inhibitors and
coatings into our fertilizer products
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)
• Driving the adoptions of more
sustainable practices and
products (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
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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
being executed 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%
14%
8%
17%
Youngest asset base relative to global peers with approximately
34% of OCI production capacity under 5 years old
Contribution to SDGs
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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 89% lower than the global average
for nitric acids plants, and our overall NOx emissions are 55% 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 22.
In 2021 we:
ACHIEVING OUR TARGETS
CONTINUED
Operational excellence
Sold 0.3 million tons of CO
2
to other industrial users
Captured 4.3 million tons of CO
2
by
using it in our production processes
Purchased 0.2 million tons of
CO
2
to produce methanol
Maximising production
efficiencies while minimizing
emissions and waste
Contribution to SDGs
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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 green methanol, blue and green ammonia, and diesel exhaust fluid.
Green methanol
We are a leading green methanol (also referred to as bio-methanol) producer, using biogas
rather than natural gas at our Dutch and US methanol plants. Green 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, green methanol provides a 60% reduction in greenhouse gas emissions
versus petrol or diesel, which means it is an excellent hydrogen fuel to meet renewable fuel
standards.
Green methanol is a fast-growing product with our sales volumes increasing at over 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.
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
in GHG emissions
Cars Tankers Biodiesel
Key transport markets
Contribution to SDGs
Leading methanol platform
#1
Producer
Largest producer of
green methanol globally
6
Years
Leading market presence
in green methanol since 2015
ISCC
Certified
Green methanol certified
by ISCC EU and ISCC Plus
60% GHG
Reduction
In emissions vs. petrol/gasoline
Exclusive
Supply
Exclusive supply agreements with
ExxonMobil, Essar and Greenergy in the UK
Current Green Methanol Customers
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CASE STUDY:
OCI fuels win races
OCI is proud to be the official sponsor of the FIA World Rally Championship’s new
sustainable, fossil-free hydrogen fuel.
Partnering with P1 Fuels, OCI’s green methanol is used to make 100% sustainable
hydrogen fuel.
Running on our fuel, P1 Fuels achieved their first ever win at the WRC Rallye
Monte-Carlo 2022.
Put to the test in the French Alps during the peak of winter and navigating grueling
weather including ice and snow, it is vital the teams use a fuel that can power high-
performance engines under extreme conditions.
As part of the championship’s commitment to use hydrogen fuel from 2022, our
fuel is the first of its kind to be used in a FIA World Championship series and the
start of a new era for racing.
Contribution to SDGs
P1 Fuels achieved their
first ever win at the WRC
Rallye Monte-Carlo 2022
ACHIEVING OUR TARGETS
CONTINUED
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Diesel Exhaust Fluid (DEF)
DEF, which is also known as AdBlue in Europe and marketed as AdGreen by Fertil, is a non-
hazardous aqueous urea solution consisting of approximately 67.5% deionized water and
approximately 32.5% urea. DEF is used in Selective Catalytic Reduction (SCR) systems to lower
harmful vehicle exhaust emissions from diesel engines, with the added advantage of improving
vehicle fuel economy by approximately 5% and using diesel fuel more efficiently. DEF breaks down
nitrogen oxides emissions into nitrogen gas and water vapor, thereby eliminating environmentally
harmful emissions from cars, trucks, buses and other heavy-duty vehicles.
We are seeing strong regulatory-driven growth DEF, often our highest margin product out of
IFCo. 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. We also have DEF production capabilities of approximately
450 thousand metric tons at Fertiglobe.
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, leaving few near-term
alternatives to DEF for emissions abatement in truck and rail.
ACHIEVING OUR TARGETS
CONTINUED
Product innovation
continued
Contribution to SDGs
Available DEF capacity (ktpa)
450
1,019
179
Fertiglobe
IFCo
N-7
1,648
Historic and forecast global DEF consumption
Million Metric Tons
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Europe
North America China India Middel East and Africa Other
DEF demand is expected
to grow by more than 11%
over the medium-term
Well positioned to serve growing DEF demand
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Blue and 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.
We are pursuing several low/no carbon ammonia projects and initiatives across our platform,
as described on pages 10-24.
ISCC+ Certified Green ammonia
We are 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. The GHG footprint is at least 50% lower compared to
grey ammonia and can be decarbonized further depending on customer requirements.
Proprietary Blue ammonia (BlueAm) standard
We have developed our own proprietary Blue Ammonia (BlueAm) standard, with the support
of SCS Consulting, that targets a 60% GHG reduction to current industry benchmark of GHG
emissions for ammonia production. The BlueAm standard is first of its kind and is annually audited,
providing a reliable and transparent standard certification of lower product emissions from a Blue
Ammonia molecule.
Product innovation
continued
Contribution to SDGs
ACHIEVING OUR TARGETS
CONTINUED
Decarbonizing our ammonia production
We are evaluating green ammonia initiatives across
our ammonia production 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
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
Water or biogas for hydrogen
Clean Energy
Merchant ammonia
capacity
2.4MT
Gross ammonia
capacity
6.9MT
N
H
HH
NH
3
Energy storage
Understanding blue and green:
Blue
: produced using hydrogen from fossil fuels (e.g.: natural gas) and capturing and sequestering the carbon dioxide produced rather than
releasing it into the atmosphere, such as CCS.
Green
: produced using hydrogen from processes that use renewable and carbon-free feedstock, such as electrolysis using renewable energy.
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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 renewable and low-carbon raw
materials, or by reducing carbon intensity our production
processes for ammonia and methanol through operational
excellence and CCUS, 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 green 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
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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.
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.
CASE STUDY:
OCI FULFILLS CUSTOMER DEMANDS TO REDUCE
EMISSIONS IN THE VALUE CHAIN
CONTINUED
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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,
last 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.
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
working with partners to evaluate the best suited urease and nitrification inhibition technologies as
well as other controlled release coatings to implement in our production processes. We work with
credible experimental stations in key markets to conduct product trials and evaluating them on
efficacy, nutrient use efficiency and scope 3 GHG impacts.
CAN+S
The importance of sulfur has become increasingly recognized by farmers, especially in Europe,
where demand for CAN+S is growing. We are evaluating the introduction of CAN+S for early
season application in Europe, as adding sulfur may have added benefits for better nutrient use
efficiency, which we are confirming in product trials.
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
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GHG EMISSIONS AND ENERGY USE
Unit 2019 2020 2021
Energy (Ammonia*)
Energy consumption TJ 211,541 206,033
200,556
Energy intensity GJ / metric ton gross production 36.64 36.36
36.05
Energy (Consolidated)
Energy consumption TJ 288,817 293,846
283,605
Energy intensity GJ / ton product 18.98 18.86
19.22
Emissions to Air*
GHG emissions (Scope 1)
million tons of CO
2
e 9.50 9.20
9.55
GHG emissions (Scope 1 - CO2 to Downstream) million tons of CO
2
e 4.93 5.32
4.65
GHG emissions (Scope 2) million tons of CO
2
e 0.62 0.66
0.65
Total GHG emissions (Scope 1 + 2 EU ETS)
million tons of CO
2
e 15.06 15.18
14.85
GHG intensity (Scope 1 and 2)
ton CO
2
e / N-ton 2.37 2.31
2.34
Scope 1 emissions covered under emissions limiting
regulations % (Scope 1 – Direct) 17.7% 16.0%
14.0%
NOx metric tons 3,018 3,485
3,120
N
2
O metric tons 132 151
151
SO
2
metric tons 158 163
137
VOCs metric tons 134 143
114
* Data has been restated to account for corrections following a comprehensive review.
2021 energy and air emissions scorecard
Contribution to SDGs
Greenhouse gas intensity
2.37
2019
Metric ton CO
2
e / nutrient ton
product
2.31
2020
2.34
2021
NOx intensity
Metric ton NOx / thousand
nutrient ton product
0.47
2019
0.53
2020
0.49
2021
SO
2
intensity
Metric ton SO
2
/ thousand
nutrient ton product
0.02
2019
0.02
2020
0.02
2021
N
2
O intensity
Metric ton N
2
O/ thousand nutrient
ton product
0.02
2019
0.02
2020
0.02
2021
We have worked diligently to reduce our greenhouse gas emissions at all sites
through our operational excellence programs and initiatives to develop lower
carbon products.
During the year, we achieved a 0.8% improvement in ammonia energy
intensity as compared to 2020, and a 1.6% improvement against our 2019
baseline.
This contributed to absolute Scope 1 and 2 emissions decreasing by 2.2%
year-on-year and 1.4% against our 2019 baseline, with total production
remaining relatively stable at approximately 6.4 million tons on a nutrient-ton
basis for ammonia and product ton basis for methanol.
Our GHG intensity has remained relatively constant from our baseline,
increasing 1.3% year-on-year and decreasing 1.3% from our baseline as a
result of typical variations in production and maintenance activities at our
facilities, and fluctuations in the production denominator in nutrient versus
metric tons. We believe we are on track to achieve our 2030 GHG intensity
reduction target, as the implementation of our operational excellence
accelerates, and the execution of our lower carbon projects completes in
the latter part of our target horizon.
Our other emissions to air, such as NOx, N
2
O, SOx, and VOCs remain
amongst the lowest in the industry, and have all decreased year-on-year.
We will continue to look for incremental room for improvement at these low
emissions levels.
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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 2021, our facilities reported 21 environmental incidents (EI), representing an environmental
incident rate (EIR) of 0.35. None of these incidents were classified as major and five 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 0.27.
Contribution to SDGs
RT-CH-140a.3
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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
CONTINUED
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Contribution to SDGs
Unit 2019 2020 2021
Effluents and waste*
Hazardous waste reused, recycled or recovered Thousand metric tons 1.98 1.60
2.37
Hazardous waste treated or disposed of Thousand metric tons 1.27 1.50
1.62
Non-hazardous waste reused, recycled or recovered Thousand metric tons 1.80 1.86
2.75
Non-hazardous waste treated or disposed of Thousand metric tons 18.90 27.33
14.16
Water**
Total intake by source 92.52
Million cubic meters
91.1387.78
Groundwater Million cubic meters 17.34 17.89
16.22
Seawater Million cubic meters 49.43 48.00
46.21
Surface water Million cubic meters 20.71 20.74
19.71
Third party water Million cubic meters 3.65 5.89
5.64
Total water discharge by destination
Million cubic meters
52.2149.12
42.27
Groundwater Million cubic meters 4.77 4.62
2.35
Seawater Million cubic meters 41.17 37.88
31.05
Surface water Million cubic meters 1.25 1.43
2.38
Third party water Million cubic meters 5.02 5.19
6.49
Water Stress
Water withdrawn in regions with High or Extremely High
Baseline Water Stress
% 73% 71%
72%
Water consumed in regions with High or Extremely High
Baseline Water Stress
%
58% 57%
62%
Environmental incidents
Environmental incidents
# 36 37
21
Environmental Incident Rate (EIR) Per 200,000 hours worked 0.59 0.66
0.35
2021 water and waste scorecard
•
Surface water 22%
•
Groundwater 19%
•
Seawater 53%
• Third party 6%
2021 water
intake by source
Total water intake
87.78 million cubic meters
•
Surface water 10%
•
Groundwater 6%
•
Seawater 73%
• Third party 11%
2021 water
discharge by destination
Total water discharge
42.27 million cubic meters
* Restated to account for 50% share in Natgasoline in historical years.
** 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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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 58% 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 novel solution 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
Both EFC and EBIC have implemented a wastewater treatment and re-use closed loop system
for cooling water that reduces 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.
RT-CH-140a.3
Contribution to SDGs
CASE STUDY:
WATER AND WASTE
CONTINUED
2.13
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
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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 (N
2
O), nitrogen
oxides (NOx), sulfur oxides (SOx), particulates, and volatile organic
compounds (VOCs), as reported on page 61.
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
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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.
>105,000 USERS
Our digital resources reached over 105,000
users in 2021
CASE STUDY:
Digital farming
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3.
SUSTAINABILITY
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 2021, we created $6.3 billion in value, of
which 63.7% was redistributed. The balance
was reinvested in OCI and $350 million will be
distributed as a dividend.
$6.3BN
$4.0BN
ECONOMIC VALUE
GENERATED
IN 2021
ECONOMIC VALUE
DISTRIBUTED
IN 2021
Payments
to suppliers
52.3% 4.9%
Employee wages
and benets
6.5%
Payments to providers of capital, governments,
and donations to communities, excluding
announced dividend payment
Value retained in OCI
through capex and other
investments
36.3%
Contribution to SDGs
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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 2021, despite the lack of in-person programs due
to COVID-19 restrictions, 511 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
>385,000
Meals provided in
South East Texas since 2015
12,595
Students reached since 2015
Contribution to SDGs
OCI N.V.
Annual Report 2021
70Strategy and
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Sustainability
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performance
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and compliance
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Partnership with JINC
OCI is proud to support JINC, aDutch organization
that provides underprivileged8–16-year-olds with
mentorship opportunities in various professions, helping
them find out what kind of work suits their talents and
how to apply for a job. JINC reaches more than 65,000
children each year.
Beginning in 2021, OCI has partnered with JINC to
provide support both through financial contributions
and by availing employee volunteers for training and
coachingacross our Dutch operations.
We are proud to work with JINC, as their goal fits
perfectly with our mission to enthuse young, diverse and
local talent to pursue careers in the chemical industry.
By collaborating with JINC, we not only help young
people to create a better future, but we also offer our
employees the opportunity to actively contribute to this.
Despite limitations imposed by COVID-19, during the
year we both hosted students and went to them as
volunteers. 22 employees volunteered in the following
programs, reaching 171 students:
• OCI Nitrogen hosted three intern days
(‘Bliksemstage’) for primary and secondary school
students, allowing them to discover the world of
work. Questions covered included: What kind of jobs
do we have at OCI Nitrogen? What kind of industry
do we work in? The internships were conducted
partly in the office/partly on location.
• Job application training: students learn how to
effectively interview and apply for jobs.
• Digital skills training: students learn the importance of
digital skills in education and the labor market.
• Career coach: volunteers act as a role model to guide
and mentor 4 students each during the school year
on their future education.
HOW WE CREATE VALUE
FOR OUR COMMUNITIES
CONTINUED
Our 2021 outreach
In 2021, 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
Contribution to SDGs
Encouraging
local talent
OCI Beaumont’s cooperative
education (co-op) program invites
Engineering, Accounting, and
Operations students from Lamar
University to participate in paid
on-the-job training related to their
fields of study.
During the year, OCI Beaumont
hosted 11 students as semester-
long interns in the plant’s
accounting, operator, and
engineering functions.
OCI Beaumont also encouraged
female engineering students by
donating to Lamar University’s
Society of Women Engineers for a
project for the Senior Design Team
of Engineers and hosting a virtual
company information session to
introduce the company to female
engineering students looking to
participate in co-ops or apply for
full-time positions after graduation.
Fertil’s College Students Internship
Program serves the community
by providing experiential learning
opportunity for college students
through practical applications and
skills development.
During the year 23 university and
college students participated
in a virtual 6–12-week program
with an assigned Fertil employee
coaching them for the duration of
their internship. Students interned
various functions, including
operations, electrical, HSE, IT,
finance, communications, and HR.
OCI N.V.
Annual Report 2021
71Strategy and
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governance
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performance
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statements
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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 3,853 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 46 nationalities located in ten countries,
with multiple ethnicities, religious beliefs, cultures, ages,
orientations, 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 that allows
every voice in our organization to be protected, heard, and
valued. We have translated this commitment into action through
our 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
opportunities, and develop employee networks that help them
succeed.
During the year, we continued to focus on D&I education and
training, with the balance of our workforce completing the de-
biasing training program that was launched in 2020. We also
launched a pilot mentoring program – Women in Leadership
Roles – the learnings from which will be translated into a
groupwide mentoring program in the near future.
At the Board level, in line with the Board D&I, we continue to
prioritize the recruitment of female candidates should a board
vacancy arise, with the percentage of female board members
currently at 23%. Women as a percentage of total employees
increased to 11.37% in 2021 from 10.51% in 2020, with the
ratio of female-to-male hires doubling year-on-year resulting in
30% of group hires being women in 2021. Approximately 24%
of leadership positions across the organization were held by
women, indicating we are making excellent progress to achieve
our 25% by 2025 target. 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. The OneOCI
platform provides 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. As part of our wider engagement efforts
under the OneOCI program, we plan to conduct a groupwide
employee engagement survey in 2022 to identify our internal
baseline and develop targeted engagement actions per site and
function.
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 are committed to
fostering an inclusive
culture with a diverse
workforce, where every
person is recognized,
valued, and thrives
Contribution to SDGs
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Annual Report 2021
72Strategy and
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OUR EMPLOYEES
CONTINUED
Talent development and retention
continued
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 by building internal
bench strength across our organization. We continuously monitor and
stimulate the development of our employees with the aim of building
a robust leadership pipeline and aim to fill a meaningful percentage of
key vacancies with internal candidates wherever possible.
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 37% 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
21%
•
35-44
42%
•
45-54
23%
•
55-64
11%
•
65+
1%
•
Female
30%
•
Male
70%
•
0-5 years
25%
•
6-10 years
25%
•
11-20 years
40%
•
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
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
OCI N.V.
Annual Report 2021
73Strategy and
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OUR EMPLOYEES
CONTINUED
3,853
Direct employees
in 2021
100%
Improvement in female-to-male
hiring ratio in 2021
2.7%
Voluntary turnover rates
46
Nationalities in our
global workforce
130%
Increase in female employees
in technical roles
37%
Employees covered by
collective bargaining or unions
$100K
Average employee
annual compensation
24%
Percentage of women in
leadership positions
Working at OCI Unit 2019 2020 2021
Employees*
Total employees # 3,715 3,682
3,853
Full-time # 3,622 3,602
3,779
Part-time # 93 80
74
Engagement and development
Voluntary turnover rate % 2.0% 2.2%
2.7%
Employee absenteeism % 3.0% 1.9%
1.7%
Employees covered by Collective Bargaining orUnions % 37.7% 38.7%
37.2%
Average spending on training and development $ / employee 1,442 218
321
Compliance & Governance
Incident notifications # 12 9
12
Incidents investigated # 12 9
12
Substantial cases # 0 0
1
Anonymous notifications via hotline # 3 1
4
Cybersecurity training (various topics)** # employees reached 1,938 1,921
1,064
Compliance training (various topics)* # employees reached 973 2,002
1,865
Gender
Women % 10.3% 10.5%
11.4%
Women in technical roles % 1.1% 1.5%
3.3%
Women non-technical roles % 9.2% 9.0%
8.1%
Women on the Board of Directors % 16.7% 23.1%
23.1%
Women in leadership positions %
18.2% 20.2%
24.0%
Age profile
under 25
% 1.7% 1.9%
1.9%
25-34 % 21.3% 18.1%
20.8%
35-44 % 41.8% 42.1%
42.6%
45-54 % 22.3% 25.1%
23.0%
55-64 % 12.1% 11.9%
10.8%
65+ %
0.8%
0.9%
0.9%
Years of service
0-5 years
% 27.3% 21.7%
25.2%
6-10 years % 25.3% 25.1%
25.0%
11-20 years % 36.8% 42.8%
39.7%
21+ years % 10.6% 10.4%
10.2%
Contribution to SDGs
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Annual Report 2021
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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 and receives quarterly updates. The
HSE function is led by the Corporate HSE Director, who reports
to the Vice President of Manufacturing. The HSE organization
comprises corporate and local teams who are responsible for
HSE compliance, monitoring, and reporting.
The HSE Policy provides our sites, employees, and contractors
with a set of standards and procedures based on industry
standards and global best practices. Our HSE policies and
standards apply to all employees and contractors, regardless
of employment type.
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 & Sustainability Committee sets groupwide targets that are
cascaded to 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
After a record safety performance in 2020, we experienced
more incidents year-on-year in 2021 resulting in a lost-time
injury rate (LTIR) of 0.2 and a total recordable injury rate (TRIR) of
0.35. We take every incident seriously and have conducted full
investigations and incident reports for each, sharing learning and
best practices across the group after each incident in an effort
to avoid repetition.
We also tragically suffered a contractor fatality during the year,
the first fatality in the history of OCI. We are deeply saddened
by this loss, which occurred when a contractor fell from the top
of a conveyor at a loading jetty. We are committed to enforcing
a culture of zero injuries, where every person is safe at all times,
and a full investigation was launched with learnings implemented
across our sites. During the year, two of our sites achieved zero
injuries, and five of our sites achieved zero employee lost-time
injuries.
While we are proud of every employee’s and contractor’s
diligence and attention to safety, which has brought our total
recordable injury rate down by 58% since 2014, we do not
take a decline in safety performance lightly. Accordingly, we
maintain an awareness program and refresher sessions for all
employees and contractors as part of our training program. We
also reinforce our HSE standards among contractors, which
have historically consistently suffered more incidents than our
employees.
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.
RT-CH-320a.2
HEALTH & SAFETY
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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 0.55 in 2021, well below our internal target of 0.7
but above our 2020 PSIR of 0.38.
None of the incidents were categorized as major and 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. All PSIs are
reviewed with a root-cause-analysis with lessons learned shared
across all sites. We continue to work diligently to reduce the
number of PSIs 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 ISO9001
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.
• 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 2021 were leak prevention rules, best practices
sharing from the sites’ Process Safety Management program,
and learning from sites’ key safety incidents.
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
RT-CH-320a.2
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
•
BlueAm Standard
EFC
✔
✔ ✔ ✔
• DEF added to ISO 9001
EBIC
✔
✔ ✔ ✔
Fertil
✔ ✔ ✔
• ISO 50001 – Energy Management System
•
RC 14001 – Responsible Care Management System
Sorfert
✔
IFCo
Natgasoline
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Annual Report 2021
76Strategy and
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HEALTH AND SAFETY
CONTINUED
4. Health and wellness of all employees
Occupational health and general well-being are 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 & Sustainability 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
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.
OCI N.V.
Annual Report 2021
77Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
HEALTH AND SAFETY
CONTINUED
Unit 2020 2021
Safety
Lost Time Injury Rate - total Per 200,000 hours worked 0.09
0.20
Lost Time Injury Rate - employees Per 200,000 hours worked 0.06
0.20
Lost Time Injury Rate - contractors Per 200,000 hours worked 0.14
0.21
Total Recordable Injury Rate - total Per 200,000 hours worked 0.23
0.35
Total Recordable Injury Rate - employees
Per 200,000 hours worked 0.12
0.36
Total Recordable Injury Rate - contractors Per 200,000 hours worked 0.42
0.33
Fatalities # 0
1
Process Safety Incidents # 21
33
Process Safety Total Incident Rate
Per 200,000 hours worked 0.38
0.55
Significant Process Safety Incidents count 21
33
Major Process Safety Incidents count 0
0
Significant Process Safety Total Incident Rate cases per 200,000 hours worked 0.38
0.55
Major Process Safety Total Incident Rate cases per 200,000 hours worked 0
0
2021 SAFETY SCORECARD
11.99
Million man hours worked
2
Smoking
free sites
ZERO
OCI Beaumont achieved 0 TRIRs
for the fth consecutive year
1.7%
Occupational illness rate
Lost Time Injury Rate
0.09
0.06
0.14
2020
0.20 0.20
0.21
2021
Total Recordable Injury Rate
0.23
0.12
0.42
2020
0.35
0.36
0.33
2021
Total
Employees
Contractors
OCI N.V.
Annual Report 2021
78Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
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.
RT-CH-210a.1
HEALTH AND SAFETY
CONTINUED
CASE STUDY:
OCI N.V.
Annual Report 2021
79Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
3.
SUSTAINABILITY
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 94.
Our ERM framework is described on pages 82-93 and our approach to climate risk is described
on page 46. Our Compliance framework, including our ethics and anti-corruption processes, is
described on page 92.
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 five times in 2021 and its activities and areas of focus
during the year are described on page 102.
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 Sustainability Vice President, who joined OCI in 2021. 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.
The Sustainability Vice President oversees the group’s sustainability function and execution of
our groupwide sustainability strategy in close cooperation with other group functions and local
leadership.
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.
OCI N.V.
Annual Report 2021
81Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
4.
RISK MANAGEMENT
& COMPLIANCE
ENTERPRISE RISK MANAGEMENT
AND INTERNAL CONTROL
TCFD Risk Management (b) (c)
OCI N.V.
Annual Report 2021
83Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Our 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 45-46. We also consider SASB Chemicals Sustainability Accounting
Standards along with TCFD recommendations when assessing our climate-related risks, as
described on page 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)
OCI N.V.
Annual Report 2021
84Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
OPERATING 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, and
assists in monitoring and investigating
Whistleblower reports
•
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
•
Steering and supervision of the
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 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
•
Internal Audit & Risk performs periodic
independent internal audits of operating
and holding companies. Management is
consulted on performance developments
and gaps and remediation plans
•
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
•
Internal Audit & Risk assists the
compliance function in monitoring the
Whistleblower Hotline and in carrying out
investigations as deemed necessary
BOARD OVERSIGHT
•
Defines risk appetite and oversees risk
management strategies and activities
•
Delegates responsibility to the Executive
Directors and provides resources to
achieve the objectives of the organization
•
Oversees an independent Internal Audit
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
OCI N.V.
Annual Report 2021
85Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
STRATEGIC
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 space
a leverage ratio of less than 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 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
POLITICAL AND
GEOPOLITICAL 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.
In addition, as our products and key inputs are global
commodities, we are exposed to the impacts of global geopolitical
instability, such as the macroeconomic and geopolitical volatility
caused by the recent Russian military action in Ukraine and resulting
economic and political responses by multiple governments. Our
businesses may also be affected by potential unilateral actions by
governments to control socioeconomic impacts.
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 57 countries in 2021.
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.
ABILITY TO EXECUTE
STRATEGIC PROJECTS
AND INVESTMENTS
RELATED TO OUR
DECARBONIZATION
STRATEGY
We have announced several projects, investments and initiatives
related to our hydrogen strategy and development of our no/low
carbon portfolio, the success of which is dependent on several
exogenous factors such as regulatory support and government
decarbonization policies, the timely development of sustainable
technologies, supply and demand dynamics for blue and green
ammonia and methanol, and the timing of the global transition to
a hydrogen economy.
Accordingly, our strategic projects, expansion of existing assets,
and construction of new assets may not be as profitable as
anticipated, and may be subject to integration, regulatory,
environmental, political, legal and economic risks, which could
adversely affect our business, results of operations, financial
condition and cash flows. Please refer to page 46 for a description
of the risks and opportunities related to climate change.
We have developed a comprehensive decarbonization strategy and believe
we have adequate mitigation and sustainability strategies to maximize the
opportunities to develop our business and help combat climate change, including
capitalizing on the substantial hydrogen economy opportunities afforded to us by
our primary products – ammonia and methanol.
We have developed a strong value creation logic to evaluate our sustainability
projects, with clear capital allocation targets, a focus on strategic partnerships
and low-capex solutions, and conservative pricing assumptions for emerging
products. We are committed to maintaining a robust and disciplined capital
allocation policy designed to balance the availability of funds and excess free
cash flow for dividend distribution while pursuing value accretive ESG and other
growth opportunities, all within a target to maintain less than 2x net leverage
through the cycle and an investment grade debt profile.
RISK MANAGEMENT
Strategic Risks
ASSOCIATED STRATEGIC PRIORITIES
Commercial Strategy Business Optimization
Risk Rating
Risk decreasing Risk stable
Risk increasing
OCI N.V.
Annual Report 2021
86Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Risk Risk Rating Description
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 46 for
a description of the risks and opportunities presented by climate
change.
Adverse weather conditions and natural disasters, health
epidemics or pandemics (including the current COVID-19
outbreak), and other extraordinary events could result in property
damage, loss of life, production interruptions, price volatility, 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 the Sustainability Report for a description of how we
intend to reduce our environmental impact and contribute to achieving global
decarbonization goals.
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 79.
RISK MANAGEMENT
Strategic Risks
continued
ASSOCIATED STRATEGIC PRIORITIES
Sustainability Operational Excellence
Risk Rating
Risk decreasing Risk stable
Risk increasing
OCI N.V.
Annual Report 2021
87Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Risk Risk Rating Description
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 both our products and 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.
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 maintain
hedge positions based on a risk management strategy approved by executive
management.
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
OCI N.V.
Annual Report 2021
88Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Risk Risk Rating Description
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. We perform third-party expert audits on plant
reliability and pre turnaround audits. 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 face risks to our ability to employ, develop, and retain talented
employees, which is is essential to our objective of maintaining
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 22 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 continue to institute employee succession programs 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
OCI N.V.
Annual Report 2021
89Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Risk Risk Rating Description
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, and have achieved significant deleveraging to
further enhance our credit risk profile. 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 (for FX translation risk) and where appropriate, by hedging
transactional exposures that exist at our operating companies. We also hedge
our interest rate risks by maintaining a debt portfolio which predominantly carries
fixed-rates.
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 assess and update our security controls and defense strategies
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, training, 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 acceptable. 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
OCI N.V.
Annual Report 2021
90Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
ASSOCIATED STRATEGIC PRIORITIES
Sustainability Operational Excellence
Risk Risk Rating Description
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 governance, 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, 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 the Sustainability Report 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 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 & Sustainability Committee supervises our HSE activities,
as described in the HSE Committee report.
Risk Rating
Risk decreasing Risk stable
Risk increasing
RISK MANAGEMENT
Regulatory Risks
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Annual Report 2021
91Strategy and
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information
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 2021, 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 2021, amongst others, the following compliance requirements and activities were achieved:
• Training and awareness sessions on various compliance topics, among which on the Code of
Conduct, Whistleblowing policy, conflicts of interest and competition law.
• Development and implementation of a process and training for commodity trading.
• Enhanced the third-party screening approach amongst others by fully implementing our
Business Partner Code of Conduct.
• 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 2021, we received 12 incident notifications. All incidents were investigated, with no
substantial cases found.
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
OCI N.V.
Annual Report 2021
92Strategy and
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Other
information
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, all prospective third-party Business Partners are
screened prior to engagement. 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 local internal control officer of each site 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
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
>4,800
REGULAR
100%
OCI N.V.
Annual Report 2021
93Strategy and
value creation Sustainability
Corporate
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performance
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and compliance
Financial
statements
Other
information
5.
CORPORATE
GOVERNANCE
OCI achieved considerable commercial, operational,
organizational, and strategic milestones during 2021, resulting
in a record year for the Company and the first dividend to
shareholders of $ 350 million (€1.45 per share).
The Board of Directors (Board) oversaw and approved the
successful initial public offering of Fertiglobe, which was a
landmark listing on the Abu Dhabi Securities Exchange (ADX) as
the third largest IPO and the first ADGM free zone company to
list on the ADX. The Board also approved a strategic alliance for
the OCI Methanol Group with two leading global investors, ADQ
and Alpha Dhabi Holding, through which the investors have
acquired a 15% stake for a total consideration of $375 million
and positions the methanol group to pursue future growth
initiatives in hydrogen-based applications, including fuel.
We also achieved our net leverage goals during 2021, as our
growth strategy and competitive business model started to
pay off, and as a result we are now quickly approaching our
objective to reach an Investment Grade credit profile and our
credit ratings were upgraded by all agencies. The Board has
approved a new dividend / capital allocation policy, which
combines a consistent base return of capital of $400 million
per year with an additional variable component linked to FCF
generated, balancing with the pursuit of value accretive ESG
and other growth opportunities.
The Company has made good progress on developing
pathways to achieve its decarbonization ambitions, with multiple
blue and green ammonia and methanol projects progressing
well as described throughout this annual report. As one of
the largest producers and traders of ammonia and methanol
globally, with a strategically located asset base and access to
abundant low-cost renewable energy sources, we are a pioneer
in helping the decarbonisation of sectors that make up around
90% of global greenhouse gas emissions and will continue to
work diligently to deliver green hydrogen all over the world to fuel
the clean economy and meet growing demand for renewable
sources of clean energy.
Finally, we have made progress in improving our diversity and
inclusion (D&I), with female representation in senior leadership
positions now at 24%. Our D&I program focused on education
and training during the year, and developed a three-year
diversity and inclusion roadmap that aims to translate our
commitment into action, allowing us to firmly anchor an inclusive
culture in every aspect of our business.
For the year ended 31 December 2021, the Board reports the
following:
• The Board has reviewed and discussed the audited financial
statements for the year 2021.
• 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 2021 Annual
Report (Annual Report).
The Board recommends that the General Meeting of
Shareholders (GM) adopts the 2021 financial statements
included in this Annual Report and looks forward to overseeing
continued excellence in every aspect in 2022.
MICHAEL BENNETT
CO-CHAIR
INTRODUCTION
OCI N.V.
Annual Report 2021
95Strategy and
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Other
information
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
3
28,500 81,564,223 84,287 130,370 18,258
Committee
membership
1
- - - -
Attendance
at Board and
Committee
meetings
2
BoD (5/5) BoD (5/5) BoD (5/5) BoD (5/5) BoD (5/5)
Current external
appointments
• Director Morningside College
• Please see the summary of skills
and experience on page 99
• 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
• Please see the summary of skills
and experience on page 99
Please see the summary of skills and
experience on page 99
Risk management and for further
experience please see the summary
of skills and experience on page 99
• EVP HR NNS Luxembourg S.à r.l.
• Please see the summary of skills
and experience on page 99
BOARD PROFILE
OCI N.V.
Annual Report 2021
96Strategy and
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governance
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performance
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and compliance
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statements
Other
information
N&RC
N&RC (5/5)
1
Board and Committees: BoD: Board of Directors, AC: Audit Committee, HSE&SC: Health, Safety and Environment & Sustainability Committee and N&RC: Nomination and Remuneration Committee
2
In addition to 5 Board meetings the Board participated in an ESG training and virtually visited EBIC/EFC
3
As at publication date of the 2021 Annual Report
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
3
5,000 70,190 3,725 40,000
Committee
membership
1
Attendance
at Board and
Committee
meetings
2
BoD (5/5)
AC (4/5)
BoD (5/5)
AC (5/5)
BoD (5/5)
AC (5/5)
BoD (5/5)
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 99
• 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.
• Member Advisory Committee Avanti
Acquisition Corporation
• Please see the summary of skills and
experience on page 99
• Non-Executive Chairman TMF Group
• Supervisory Board Member Royal Schiphol
Group N.V.
• Director Randstad Beheer B.V.
• Member advisory board SUITSUPPLY
• Vice-Chair Supervisory Board
Goldschmeding Foundation
• Non-Executive Director VEON Ltd.
(Chairman of the Audit and Risk Committee)
4
• Risk management and for further experience
please see the summary of skills and
experience on page 99
• 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 99
BOARD PROFILE
CONTINUED
OCI N.V.
Annual Report 2021
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value creation Sustainability
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governance
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performance
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and compliance
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Other
information
AC, N&RC (chair) AC, N&RC AC (chair), N&RC HSE&SC
HSE&SC (4/5)
N&RC (5/5)N&RC (5/5)N&RC (5/5)
1
Board and Committees: BoD: Board of Directors, AC: Audit Committee, HSE&SC: Health, Safety and Environment & Sustainability Committee and N&RC: Nomination and Remuneration Committee
2
In addition to 5 Board meetings the Board participated in an ESG training and virtually visited EBIC/EFC
3
As at publication date of the 2021 Annual Report
4
Resigned 7 March 2022
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
3
- 4,131 4,000 -
Committee
membership
1
AC
Attendance
at Board and
Committee
meetings
2
BoD (5/5)
HSE&SC (5/5)
BoD (5/5)
HSE&SC (5/5)
BoD (5/5)
AC (5/5)
BoD (5/5)
HSE&SC (5/5)
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 99
• Member of the Council on Foreign Relations
and the American Academy of Diplomacy
• Please see the summary of skills and
experience on page 99
• 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 99
• 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 99
BOARD PROFILE
CONTINUED
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information
HSE&SC (chair), N&RC HSE&SC HSE&SC
N&RC (4/5)
1
Board and Committees: BoD: Board of Directors, AC: Audit Committee, HSE&SC: Health, Safety and Environment & Sustainability Committee and N&RC: Nomination and Remuneration Committee
2
In addition to 5 Board meetings the Board participated in an ESG training and virtually visited EBIC/EFC
3
As at publication date of the 2021 Annual Report
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
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99Strategy and
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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 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 and
local management and their teams. 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
Shareholder Communications Policy
Privacy and Data Protection Policy
DCS Policy
BOARD REPORT
OCI N.V.
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100Strategy and
value creation Sustainability
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governance
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performance
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and compliance
Financial
statements
Other
information
BOARD REPORT
CONTINUED
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 Health, Safety and
Environment & 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.
OCI has a Group Delegation of Internal Authority Policy in place in which the Executive Directors
delegate the authority to management to internally approve commitments that relate to daily
management and operations of the Company. It governs which internal approvals are required
for which actions leading to an efficient yet controlled process. Checks and balances have been
set by implementing 3 authorizing steps for entering into external commitments; consisting of
consultation, internal approval and a dual signing authority of two individuals that commit in the
name of OCI group entities.
Executive Directors
The Executive Directors are charged with the day-to-day management of OCI. They are
responsible for the continuity of OCI, to pursue the strategies set by the Board, 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 commitment to drive the decarbonization of food, fuel, and feedstock is steered by a
differentiated strategy focused on capital discipline and value creation, coupled with a unique
green portfolio that enables the hydrogen economy, underpinned by strong governance. To deliver
on this, our strategic priorities are organized in five key pillars: operational excellence, business
optimization, commercial excellence, sustainability, and free cash flow maximization, as described
in the Strategy and Value Creation section of this annual report.
During 2021, the Board was composed of the following four Executive Directors: Mr. Nassef
Sawiris (Executive Chair), Mr. Ahmed El-Hoshy (CEO), Mr. Hassan Badrawi (CFO) and Ms. Maud
de Vries (CLHCO). 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 the general course of affairs of the Company and its business, including, the
interests of all 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 stakeholder
engagement.
During 2021, the Board was composed of nine Non-Executive Directors: Mr. Michael Bennett,
Mr. Sipko Schat, Mr. Jérôme Guiraud, Mr. Robert Jan van de Kraats, Mr. Gregory Heckman, Ms.
Anja Montijn-Groenewoud, Mr. David Welch, Mr. Dod Fraser and Ms. Heike van de Kerkhof. Mr.
Michael Bennett is the Co-Chair and Senior Independent Non-Executive Director and Mr. Sipko
Schat is the 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 General Meeting of Shareholders (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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Annual Report 2021
101Strategy and
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2021 Board and Committee meetings
The table below summarizes how the duties of the Board and the Committees were carried out during 2021, 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’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. 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 2021 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 2021
remuneration review can be found in the Remuneration
Report beginning on page 110.
More information on HSE and sustainability can be found
in the sustainability section beginning page 35.
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
Five meetings and several interim updates, training and site
visit throughout the year.
Five Five Five
Focus topics
• Medium and long term strategy
• HSE
• ESG strategy, sustainability and regulatory developments
and decarbonization targets, strategy and projects
including the commitment to reduce scope 1 and 2 CO
2
emission intensity by 20% by 2030 and achieve carbon
neutrality by 2050
• Fertiglobe IPO
• COVID-19
• People and culture
• Diversity and inclusion
• Net debt reduction
• Refinancing strategy
• Debt capital structure optimization
• Dividend strategy
• Hedging strategy
• Commercial strategy, sales and inventories strategy /
market developments
• Operational performance and cost optimization
• Succession planning and organization design
• EBIC/EFC (Egypt) virtual site visit
• Internal controls
• Cybersecurity
• Related party transactions
• Evaluation Risk Management and Internal Controls
including the key risks facing the Group
• IT and IT (cyber) security
• Fertiglobe governance and in-control (pre and post IPO)
• Auditor tender process
• In-control statement and underlying in-control situation
• Evaluation Related Party Transactions
• Tax review
• Dividend strategy
• Refinancing
• Evaluation Group’s Compliance Framework and
effectiveness
• Financial hedging control framework
• Monitoring of material claims and litigation
• Assessment of the functioning of the external auditor,
its appointment, including scope, risk assessment and
materiality
• Internal Audit Plan and Internal Audit findings
• 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
• Fertiglobe CEO appointment
• Evaluation of the 2020 targets for the Executive Directors
• Setting 2021 targets for the Executives
• Amendment of the LTIP by including ESG measures
• Reviewed and advised on the executive compensation
• Diversity legislation and Group-wide diversity and
inclusion program
• 2021 HSE strategy and performance
• 2022 HSE plan and 2022 target setting
• Material safety incidents
• Incident reporting protocol
• HSE audit schedule and quality and outcome of the HSE
audits
• Safety performance and process safety initiatives
initiatives, including a deep dive on BioMCN
• ESG investor day
• OCI Group annual process safety conference and safety
award
• Sustainability strategy and journey linked to OCI’s overall
strategy including the commitment to reduce scope
1 and 2 CO
2
emission intensity by 20% by 2030 and
achieve carbon neutrality by 2050
• GHG intensity methodology and performance
• Safeguarding sustainability duties in the committee terms
of reference
• EBIC/EFC(Egypt) virtual site visit
• Monitor and periodically discuss the Company’s
sustainability goals, targets, risk management and
objectives and the progress made in these areas
• Sustainability reporting requirements and review of the
Company’s disclosures in the annual report, as well as
any periodic disclosures on sustainability
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Board rotation schedule
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 provided that in the event of a reappointment after an eight-year period,
reasons will be given in the board report) to facilitate that the Directors can focus on long-term
value creation in the performance of their work, thereby taking into account the bill on gender
diversity that entered into force on 1 January 2022. 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.
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. Succession planning and building bench strength for key positions
is important topic of our global HR agenda 2022. 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.
Strategy and long-term value creation
OCI's strategic priorities as described in this Annual Report 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 plant’s technology and products that help achieve
OCI's purpose of cultivating a sustainable world through cleaner fuel solutions, lower carbon
feedstocks, and global food security.
The Board focuses on matters contributing to long-term value creation and continues to be
involved in shaping the strategy, for example through continuous engagement with all its
stakeholders, including shareholders and other investors, employees, customers and suppliers,
regulators and governmental bodies, and extensive and recurring Board discussions on strategy.
Our Board carefully weighs the interests of stakeholders in developing the vision for this long-term
value creation, and regularly monitors and evaluates the progress and realization of our long-term
value creation. Topics our Board paid special attention to in 2021 were, amongst others, ESG in
general and in particular sustainability projects to decarbonize, health and safety within our global
organization, commercial strategy and operational excellence, the people & culture and IT cyber
security. The Executive Directors present the Company’s progress and realization of key strategic
objectives and initiatives at every Board meeting.
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information
Our stakeholder engagement program is described on page 38 of this Annual Report. We
maintain an ongoing dialogue with our stakeholders. In order to ensure our Board is fully apprised
of shareholders’ areas of focus, concerns, and feedback, an investor relations update is provided
at each Board meeting. We can use feedback from our key customers, suppliers and other
business in developing a vision for long-term value creation. Our unified culture, values, and
communications platform OneOCI promotes transparency, alignment, and feedback. We can
provide comments and feedback on proposed legislation that may impact our long-term strategy
to regulatory bodies such as the AFM and governments in our countries of operation, as well as
multinational regulatory bodies such as the European Commission. Via participation in various
industry groups we keep apprised of the latest within our industry and we actively participate in
the discussions on industrywide long-term strategy. With other stakeholders such as our joint
venture partners we agree on long-term strategy regarding our joint ventures.
ESG
ESG is embedded into all aspects of our organization, including our strategic objectives (as
described above), 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.
With the continuous increase of the Board’s dedicated time and focus on sustainability, the
Board’s the Health, Safety and Environment Committee evolved in 2021 to formally include
sustainability in its mandate and was therefore renamed the Health, Safety, Environment &
Sustainability Committee. The Committee’s responsibilities include overseeing the Company’s
strategy, policies and initiatives relating to sustainability matters linked to OCI’s overall strategy;
monitoring the Company’s sustainability goals, targets, risk management and objectives and the
progress made in these areas; monitoring current and emerging topics, technologies and trends
relating to Sustainability, including new or emerging opportunities and projects that may affect the
business, operations, performance or public image of the Company or are otherwise pertinent
to the Company and its stakeholders; reviewing and evaluating the sustainability performance
metrics and KPIs with a longer term view towards achieving announced Company targets; and
reviewing the Company’s Sustainability disclosures.
The Board has mandated the Company to communicate its ESG 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, including the social and
governance aspects. The Board has tasked the Executive Directors with the management of ESG
and decarbonization objectives, including the development and implementation of our ESG targets
and strategy, supported by the newly recruited VP Sustainability. New performance measures
relating to ESG have been added to the long-term incentive plan of the Executive Directors that
will apply from 2021 onwards, 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 ESG
projects and opportunities, including decarbonization projects, and report on their progress
to the Executive Directors during the site’s monthly business reviews. The Capex Committee
reviews and approves decarbonization-related capex with a view to balance our sustainability
goals with our other commitments and investment returns thresholds. We appointed a Vice
President of Sustainability in 2021 who oversees the group’s sustainability function and execution
of our groupwide sustainability strategy in close cooperation with other group functions and local
leadership.
During the year, we also centralized our advocacy efforts in a new global corporate Government
& Public Affairs team that is tasked with tracking regulatory and political developments, cultivating
strong relationships with key governmental bodies, and maximizing our ability to benefit from
policy instruments and spending plans to ensure accelerated achievement of climate goals.
Diversity & Inclusion
The Board acknowledges the importance of diversity within its Board and the organization
generally. As to diversity within the Board itself, the Board 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 taking into
account nationality, age, gender and background of education and professional experience of
the Directors. 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, thereby taking into account the bill on gender diversity that entered into force on
1 January 2022.
Following the launch of the Board Diversity program in 2019, we further reinforced our
commitment to fostering an inclusive culture with a diverse workforce, where every person is
recognized, valued, and thrives, 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 46 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, provide
sponsorship and mentorship opportunities, and develop employee networks that help them
succeed. During the year, we continued to focus on D&I education and training, with the balance
of our workforce completing the de-biasing training program that was launched in 2020. We also
launched a pilot mentoring program – Women in Leadership Roles – the learnings from which will
be translated into a groupwide mentoring program in the near future.
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On a group level, we publicly 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. Women as a percentage of total employees increased to 11.37% in 2021
from 10.51% in 2020, with the ratio of female-to-male hires doubling year-on-year resulting in
30% of group hires being women in 2021. Approximately 24% of leadership positions across the
organization were held by women, indicating we are making excellent progress to achieve our
25% by 2025 target. 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 2021 due to COVID-19 restricting international travel, the Board virtually visited EBIC/
EFC in Egypt and spoke with EBIC/EFC management. The virtual visit deepened the Board’s
understanding of the history, legacy set-up, vision, values, financial performance and cost
optimization initiatives, and operational safety performance. Great focus was given to the culture
of health, safety and environment, in line with focus of our Board and senior management. The
products and production processes were further explained during the virtual tour of the site.
In May 2021 the HSE&S Committee virtually visited BioMCN in the Netherlands. The HSE&S
Committee met with the new site director and the management team members via video
conference and deepened their understanding of BioMCN’s process safety journey. The HSE&S
Committee went on a virtual tour through the plant guided by comments of the management team
members.
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 Board and Committee meetings, annual site visits, and also as
part of their ongoing professional education.
In 2021, the Board was trained on the EU decarbonization pathways, socioeconomic implications,
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, OCI established the OneOCI
platform encouraging a dialogue across all locations. The Executive Directors host townhall
meetings during which the latest group developments and initiatives are elaborated on and include
a Q&A session for all employees. The culture of CARE – collaboration, agility, resourcefulness, and
excellence – is also promoted through 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.
Culture
As a leading global producer and distributor of hydrogen-based products, OCI is privileged to
employ the best and brightest around the world. We continue to grow rapidly and acknowledge
the importance of strengthening our group culture to become a cohesive and united global
organization. We launched the OneOCI platform last year 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 OneOCI culture is furthermore supported by the organizational re-design of certain
key staff functions such as Manufacturing, Commercial and HR. Where possible we build centers
of excellence, without losing sight of our flexibility and agile nature. We are also working on further
strengthening the project organization and focus on best-in-class project management and
execution.
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. OCI’s cultural values of CARE are incorporated throughout the organization
and employees are encouraged to uphold these values both at work and in their day-to-day
lives. The Board and Executive Directors focus on advertising these values, including through
the townhall meetings, in the performance reviews of employees and through their day-to-day
management of the company. These values fit within OCI as a leading global producer and
distributor of hydrogen-based products providing low carbon fertilizers, fuels, and feedstock to
agricultural, transportation, and industrial customers around the world.
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Other
information
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. Employees can report a concern to their immediate or next higher
level manager and if the reporting employee is uncomfortable or unable to report to his or her
immediate or the next higher-level manager, the reporting employee may directly report to the
person that is appointed to manage whistleblower cases confidentially or use the independent
outside Helpline, Ethicspoint which can be reached 24/7 on anonymous basis. Reporting
employees in The Netherlands can also make a report to an external body, The House for
Whistleblowers (Huis voor Klokkenluiders).
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 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, human rights and safe working conditions, 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.
Although ethics and compliance are perceived as a joint responsibility of the Executive Directors,
the Chief Legal and Human Capital Officer (CLHCO) has ethics and compliance included in
her portfolio. The Compliance Director, 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 Compliance Director, handles
incidents of a severe nature.
We refer to the Compliance section on page 92 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.
Human rights
OCI has a Human Rights Policy though which OCI is 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, as codified in our
Code of Conduct as part of our OCI NV Compliance Framework. This expectation extends to
our suppliers and business partners, who are required to conduct their business according to the
principles in our Business Partner Code of Conduct.
Our Human Rights Policy aims to ensure the salient human rights issues potentially arising through
our supply chain are tackled effectively and contain the following human rights principles: no
forced and child labor, non-discrimination and harassment, equal employment and development,
safe and healthy workplace, fair compensation and living wage and freedom of association and
collective bargaining. These human right principles are informed by global human rights standards,
including the International Bill of Human Rights, the International Labor Organization’s Declaration
on Fundamental Principles and Rights at Work, the United Nations Guiding Principle’s on Business
and Human Rights, and the United Nations International Children's Emergency Fund (UNICEF).
For more information on how OCI respects human rights, reference is made to page 73 and the
Human Rights policy on the website.
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Other
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IPO Fertiglobe
On 27 October 2021 Fertiglobe, the partnership between OCI and ADNOC, listed on the Abu
Dhabi Securities Exchange (ADX), becoming the first Abu Dhabi Global Market free zone company
to be traded on an onshore stock exchange in the UAE and the third largest ever listing on the
ADX.
OCI continued to hold a majority of the shares in Fertiglobe and as such OCI continues to
consolidate the results and exercise control of Fertiglobe.
OCI ensured that the appropriate governance and in-control framework was established to allow
it to maintain the right levels of control as a majority shareholder following the IPO. This reflected in
the Board- and committees composition, the applicable governance (including a clear framework
on related party transactions and conflicts of interest), the Internal Audit, Internal Control and
Risk Management set-up and the financial reporting and disclosure policies and procedures in
place. The disclosure policies and procedures provide guidance on the two regulatory frameworks
and are helpful in ensuring compliance with two different applicable regulatory regimes post the
Fertiglobe IPO.
The Board of Directors of Fertiglobe (Fertiglobe Board) is responsible for the management and
strategy. They supervise the interests of stakeholders, the creation of a culture aimed at long-term
value creation, the internal audit function, and the effectiveness of internal risk management and
control systems.
As per the IPO date, the Fertiglobe Board consists of 11 Directors of which two Executive
Directors and nine Non-Executive Directors, seven of whom are independent Directors. OCI
has the right to appoint 6 Directors. His Excellency Dr. Sultan Ahmed Al Jaber, Group CEO and
managing director of ADNOC, is the Chairperson of the Fertiglobe Board, Mr. Nassef Sawiris
(OCI’s Executive Chair) is the Executive Vice-Chairperson and OCI CEO Ahmed El-Hoshy is also
the CEO of Fertiglobe. The Board of Fertiglobe has established 3 committees, an Executive
Committee, and Audit Committee and a Nomination and Remuneration Committee and each
committee has its own set of committee terms of reference.
The Fertiglobe Board is committed to standards of corporate governance that are in line with
international best practice. Fertiglobe complies with the corporate governance requirements of the
ADX listing rules and of governing body the Emirates Securities & Commodities Authority (SCA),
the ADGM regime and Fertiglobe articles of association and reserved matters.
The Fertiglobe Board has also adopted a governance and board composition policy which
includes various principles applicable to the composition of the Fertiglobe Board, including that
there must be at least one female director. Fertiglobe’s articles of association further require that
the Fertiglobe Board meet at least four times each year.
The Fertiglobe executive management team, composed of the CEO, COO and CFO, is
responsible for the day-to-day management of Fertiglobe’s operations. Fertiglobe’s senior
management team has extensive experience in the fertilizers, chemicals, and petrochemical
industries. The team has a track record of boosting revenues and profitability and implementing
initiatives to improve operating efficiency and profit margins.
Fertiglobe’s compliance framework is comprised of policies and principles that outline in specific
terms what Fertiglobe stands for as a company and the conduct required in the workplace, in how
Fertiglobe deals with business partners, serves its customers, and the broader responsibilities
Fertiglobe has to the communities in which we work and live (such as the Fertiglobe Code of
Conduct).
Assessment 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 2021 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:
• The evolvement of the overall Board profile and composition of the Committees over the
coming years to match OCI’s strategic goals, taking into account Board rotation and diversity
law;
• The development, clarity and achievability of OCI’s strategic plan and the integration of ESG
into OCI’s business strategy and operations;
• The oversight of various aspects of risk, including the risks associated with COVID-19;
• The effectiveness of OCI’s approach to HSE and monitoring compliance with relevant
regulations and legislation;
• The culture and behaviour throughout OCI including diversity and inclusion and the level of
employee engagement;
• The auditor tender process;
• The effectiveness of Board meetings and site visit held remotely using video-conferencing
technology;
• The effectiveness of monitoring opportunities and treats to the business of new technologies
and digitalization and OCI’s strengths and weaknesses relative to competitors;
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• The effectiveness of monitoring developments in the market environment, and any likely impacts
on the business;
• The oversight of the process of listing of Fertiglobe;
• 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 the views and requirements of investors,
customers, suppliers and employees, and the development of the mechanisms by which the
Board engages with key stakeholder groups;
• 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; and
• The individual performance and personal development of each of the Board members.
The overall feedback from the evaluation in 2021 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.
Shareholders’ 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 2021 AGM was held on 25
May 2021.
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 2021, no EGM was held.
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 2021, the AGM was 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. 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 2021 GM’s:
• The adoption of the Annual Accounts 2020 and allocation of profits;
• The discharge of the Executive Directors and Non-Executive Directors from liability;
• The approval of the fee for the Chair of the HSE&SC;
• To advise on the 2020 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 2021.
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 2021 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.
BOARD REPORT
CONTINUED
OCI N.V.
Annual Report 2021
108Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
The external auditor is also present at the AGM and may be questioned on its statement of the
fairness of the financial statements.
As part of the mandatory audit firm rotation requirements in the Netherlands, KPMG can continue
as external auditor of OCI through the financial year 2022 audit. In 2021, OCI completed an audit
tender process to replace KPMG as external auditor as from the start of financial year 2023. The
selected auditor will be put up for appointment during the upcoming AGM.
Independence 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. More information on risk
management can be found in the risk management and compliance section on pages 82-93.
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 53.12% as at 31 December 2021 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 2021, 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 2021 is disclosed in the Financial Statements in
note 30.
BOARD REPORT
CONTINUED
OCI N.V.
Annual Report 2021
109Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
REMUNERATION REPORT
Introduction by the Chair of the Nomination and Remuneration Committee,
On behalf of the Board, I am pleased to present our 2021 Remuneration Report in which
we comment on OCI’s performance and the way in which 2021 events have impacted the
remuneration paid to our Executive and Non-Executive Directors.
During the year, OCI was able to deliver on its strategy. The Executive Directors effectively
navigated the Company through multiple challenges while maintaining focus on strategic
opportunities, resulting in the initial public offering on the Abu Dhabi Securities Exchange of
Fertiglobe and the strategic alliance with investors ADQ and Alpha Dhabi Holding taking a 15%
stake in OCI’s methanol business. In addition, the Executive Directors continued to lead OCI’s
progress on its ESG roadmap, as evidenced by the projects and partnerships to develop blue and
green capabilities across the group’s portfolio.
The Nomination and Remuneration Committee is satisfied by the strong financial performance
generating an impressive increase of free cash flow resulting in an unparalleled reduction of the
Company’s net debt.
Moreover, the Nomination and Remuneration Committee is appreciative of the company's
strategic change in recent years as a result of strong management focus on operational and
commercial excellence and the future strategic direction with OCI being best positioned amongst
its peers to capitalize on the hydrogen opportunity. During the year, OCI’s ESG ratings were
double upgraded by Sustainalytics and MSCI to Medium and BBB, respectively, to be amongst
the best performers in the wider nitrogen sector. On top of the strong performance in 2021
the Executive Directors successfully managed the execution of the IPO of Fertiglobe and the
strategic Methanol alliance with investors ADQ and Alpha Dhabi Holding. In recognition for this
extraordinary performance, the Nomination and Remuneration Committee proposes to grant
the Executive Director in 2022, subject to approval by our shareholders at the Annual General
Meeting, an Extraordinary Share Award. The proposed structure of this Extraordinary Share Award
is detailed in the last section of the Remuneration Report - 'Implementation of our Remuneration
Policy in 2022'.
This Remuneration Report explains the application of the 2020 Remuneration Policy
(Remuneration Policy) and is prepared in the spirit of the draft, non-binding guidelines of the
European Commission for disclosure. Mindful of the advisory vote on our 2020 Remuneration
Report, which was approved by 96.77% of the votes in favour, this Remuneration Report is
prepared in a similar format.
Our strategy integrates our financial, operational, commercial, and sustainability objectives to
create long-term, sustainable value for all our stakeholders as described throughout this 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
and social 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, a global commercial strategy, sustainable solutions,
decarbonization, and maximizing free cash flow.
Accordingly, we believe our 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 2022 AGM.
In 2021, the reward practice and particularly the sustainability targets in the incentive schemes
of the Executive Directors have been discussed with various stakeholders, starting with the ESG
investor day in March to the engagement with banks and partners on green ammonia and the
hydrogen strategy around the IPO of Fertiglobe. We actively participated in research on the topic
of Sustainability embedding practices in Dutch listed companies and the International Fertilizer
Association (IFA) as endorsed by the appointment of our CEO as IFA Board Member. Moreover,
we maintain an open dialogue across the organization through our unified culture, values and
communications platform One OCI that promotes transparency, alignment and feedback which
we can use in developing our vision for long-term value creation whilst balancing the interests of all
stakeholders. Based on on-going conversations with our shareholders and the positive feedback
from other stakeholders on the performance of our Executive Directors and the Company’s results,
I am confident the Remuneration Policy supports OCI’s strategic and operational objectives, also
on the long-term.
On behalf of the Nomination and Remuneration Committee,
Sipko Schat
Chair
OCI N.V.
Annual Report 2021
110Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
This section of the Remuneration Report details how the Remuneration Policy was applied
in 2021 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 OCI’s 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 (diversity in) 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
Board fee
Audit
Committee
Nomination and
Remuneration
Committee
Health, Safety,
Environment and
Sustainability
Committee
Extraordinary
Items
Total
Proportion
of Fixed
Remuneration
M. Bennett
2021 300,000 - 7,500 - - 307,500 100%
2020 300,000 - 7,500 - - 307,500 100%
S. Schat
2021 150,000 20,000 20,000 - - 190,000 100%
2020 150,000 20,000 20,000 - - 190,000 100%
A. Montijn-
Groenewoud
2021 150,000 - 7,500 15,833
1
- 173,333 100%
2020 150,000 - 7,500 10,000 - 167,500 100%
R.J. van
de Kraats
2021 150,000 25,000 7,500 - - 182,500 100%
2020 150,000 25,000 7,500 - - 182,500 100%
G.
Heckman
2021 150,000 - - 7,500 - 157,500 100%
2020 150,000 - - 7,500 - 157,500 100%
J. Guiraud
2021 150,000 20,000 7,500 - - 177,500 100%
2020 150,000 20,000 7,500 - - 177,500 100%
D. Welch
2021 150,000 - -
7,500 73,859
2
231,359 100%
2020 150,000 - - 7,500 90,000
3
247,500 100%
D. Fraser
2021 150,000 20,000 - - 100%
-
170,0002020 150,000 20,000 - - - 170,000 100%
H. van de
Kerkhof
4
2021 150,000 - - 7,500 - 157,500 100%
2020 29,348 - - 1,467 - 30,815 100%
J. Ter Wisch
5
2021 n/a n/a n/a n/a n/a n/a n/a
2020 69,643 9,286 3,482 - - 82,411 100%
1
At the 2021 AGM, the annual fee for the Chair of the Health, Safety, Environment and Sustainability Committee is increased
from US$10,000 to US$20,000 because of the increase of the responsibility of this Committee with Sustainability matters.
2
The amount reported as extraordinary item for Mr Welch in 2021 is the fee for services on the Board of Fertiglobe Holding
Ltd for the period 1 January - 26 October 2021
3
The amount reported as extraordinary item for Mr Welch in 2020 is the fee for services on the Board of Fertiglobe Holding
Ltd for the period 1 January - 31 December 2020
4
Appointed on 20 October 2020
5
Appointment ended on 17 June 2020
REMUNERATION REPORT
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OCI N.V.
Annual Report 2021
111Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
This section of the Remuneration Report explains how the Remuneration Policy was applied in
2021 for the Executive Directors.
Executive Directors
The Executive Directors referred to in this Remuneration Report are the Executive Chair, CEO,
CFO and CLHCO. The details of their appointment terms are as follows:
Name Title Date of appointment
Current time
commitment
N. Sawiris Executive Chair 16 January 2013 Full time
A. El-Hoshy 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
Additional
base salary
payment Annual bonus
Long-term
Incentives
cost-to-
company
2
Total
Remuneration Fixed Variable
N. Sawiris
Executive
Chair
2021 1,000,000 n/a
3
2,086,600 3,086,600 32% 68%
2020 1,583,334 n/a
4
2,393,191 3,976,525 40% 60%
A. El-Hoshy
CEO
2021 1,250,000 57,692
5
1,714,688 1,533,043 4,555,423 29% 71%
2020 1,091,667 921,032 1,420,277 3,432,976
6
32% 68%
H. Badrawi
CFO
2021 1,150,000 1,262,010 1,385,030 3,797,040 30% 70%
2020 1,150,000 878,715 1,193,956 3,222,671 36% 64%
M. de Vries
CLHCO
2021 560,000
7
614,544 509,197 1,683,741 33% 67%
2020 526,667
7
402,426 356,049 1,285,142 41% 59%
1
These figures exclude employer’s social security payments (impact $1.0 mio).
2
The amounts mentioned in this column are based on accounting standards (IFRS).
3
As Executive Chair, Mr Sawiris is not entitled to an annual bonus.
4
Mr Sawiris served as CEO until 1 August 2020. He requested the Nomination and Remuneration Committee to waive his
annual bonus entitlement.
5
Following the listing of Fertiglobe per 27 October 2021, Mr El-Hoshy receives an additional base salary payment for the
period he will serve as CEO of Fertiglobe in addition to his role as CEO of OCI.
6
Though the CEO (former COO) was appointed to the Board on 17 June 2020, with effective date 1 August 2020 in his role
as CEO, the remuneration is reported as if he was an Executive Director for the full year 2020.
7
Based on 80% contract.
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112Strategy and
value creation Sustainability
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and compliance
Financial
statements
Other
information
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.
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 2021 no extra-ordinary items or one-off
payments were paid.
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. 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 2021, the performance measures for the annual bonus can be summarized as follows:
2021 performance 2021 Bonus Pay-out
Executive
Director
Performance Measure and
weighting
Target
achievement
%
Bonus pay-
out as % of
base salary
Base salary
in USD
2021 Bonus
outcome in
USD
A. El-Hoshy
Cash flow (40%) 200% 60%
Sales volume (20%) 200% 30%
1
st
Strategic and non-financial
(12.5%) 200% 18,75%
2
nd
Strategic and non-financial
(12.5%) 200% 18.75%
HSE (15%) 86% 9.675%
Total 137.175% 1,250,000 1,714,688
H. Badrawi
Cash flow (40%) 200% 48%
Sales volume (20%) 200% 24%
1
st
Strategic and non-financial
(12.5%) 200% 15%
2
nd
Strategic and non-financial
(12.5%) 200% 15%
HSE (15%) 86% 7.74%
Total 109.74% 1,150,000 1,262,010
M. de Vries
Cash flow (40%) 200% 48%
Sales volume (20%) 200% 24%
1
st
Strategic and non-financial
(12.5%) 200% 15%
2
nd
Strategic and non-financial
(12.5%) 200% 15%
HSE (15%) 86% 7,74%
Total 109.74% 560,000 614,544
+
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
+ =
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113Strategy and
value creation Sustainability
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governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
The following table summarizes performance against the 2021 strategic and non-financial performance measures. 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 Nomination and Remuneration 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 2021 performance Outcome
A. El-Hoshy
• Strategic target (12.5%): Focusing on successful execution of the potential strategic opportunities During the year, OCI was able to deliver on its strategy despite the continued global
circumstances due to the COVID-19 pandemic and the exceptionally high gas prices
in Europe. The Executive Directors effectively navigated the company through these
challenges, reshaped the organization and hired many senior managers to lead the
global functions. They also kept focus on strategic opportunities, resulting in Fertiglobe’s
IPO on the ADX and the strategic alliance with ADQ and Alpha Dhabi Holding for the
Methanol Group. This all resulted in a large dividend recap ahead of Fertiglobe’s IPO and
a restructured commercial team with more focus on better reporting, with strong results
achieved in ammonia trading. In addition, the targets for ESG and strategy were set and
communicated to internal and external stakeholders, followed by strong performance on
the decarbonization ambitions, including multiple projects and partnerships in progress
to develop our blue and green production capacity. Moreover, the team realized large
natural gas gains from the hedging program and the group navigation on the volatility in
February, creating significant value net of production losses.
200%
• Developing Corporate Excellence and Improvement Plans via Changes to Organizational Design (12.5%)
200%
H. Badrawi
• Strategic target (12.5%): Focusing on successful execution of the potential strategic opportunities
200%
• 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 200%
• Trade and Overall Risk Management (6.25%)
200%
M. de Vries
• 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 200%
• 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 200%
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Annual Report 2021
114Strategy and
value creation Sustainability
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governance
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performance
Risk management
and compliance
Financial
statements
Other
information
The following table summarizes performance against the 2021 HSE performance measures. The
combined weight of the HSE performance measures is 15%. The 2021 HSE-performance as
assessed by the HSE&S Committee and approved by the Board is summarized in the table below.
Please refer to pages 75-77 for more information on OCI’s HSE performance.
HSE Performance Measure 2021 target
2021
Performance
outcome
Performance
score
Lost Time Injury Rate (LTIR)
0.10 0.20 0%
Total Recordable Incidents Rate (TRIR) 0.36 0.35 25%
Process Safety Incidents Rate (PSIR)
0.70 0.55 40%
Environmental Stewardship / EIR 0.40 0.27 20%
Safety Culture and Awareness qualitative target focussing on
a wide range of initiatives to
promote a strong safety culture 13.75%
50% deduction on the score of the three occupational safety elements in view
of the fatal injury of a contractor at the Fertil Site in Ruwais in April 2021 -/- 13.125%
Full year corporate HSE score 85.625%
Long-term variable remuneration
Bonus / Share Matching Plan (legacy arrangement)
The Bonus / Share Matching Plan was discontinued effective 1 January 2019. The 2018 Bonus /
Share Matching Award was the last Award made under this Plan and vested in 2021.
As at 31 December 2021, the Executive Directors had no more Bonus / Share Matching rights
under this Plan.
Restricted stock unit plan (legacy arrangement)
As at 31 December 2021, the current CEO and CLHCO had been granted Restricted Stock Units
from previous years, as follows:
Executive
Director
Award
cycle
Outstanding
year-end 2021
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
: 15-02-2022 07-02-2024
2/3
rd
: 07-02-2023 07-02-2025
2018
1
18,231 390,000 2/3
rd
: 18-04-2022 18-04-2024
M. de Vries 2018
1
9,509 203,423 2/3
rd
: 18-04-2022 18-04-2024
1
These represent awards granted before the appointment to the Board.
Vesting of the Restricted Stock Units is contingent on continued employment with OCI.
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115Strategy and
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Financial
statements
Other
information
Performance Share Units Plan
As at 31 December 2021, the Executive Directors have been granted 777,899 Performance Share Units at target. The table below summarizes the Performance Share Unit awards
outstanding at year-end 2020 and year-end 2021 with the details on the performance measures to be met for vesting.
Award
cycle
Executive
Director
Outstanding
year-end 2020
Granted
conditional in
2021
Outstanding
year-end 2021
Value at grant
date in USD
1
Performance conditions Vesting date
End of
lock-up
period
2018
N. Sawiris 84,873 - expired 2,181,674
The vesting of the 2018 PSU awards is solely based on the relative TSR ranking against
the selected peer group of 11 international fertilizer/chemicals/gas companies (Celanese,
CF Industries, DSM, Intrepid Potash, Lanxess, Methanex, Mosaic, Nutrien (after merger of
Agrium and Potash Corporation), Solvay, Westlake Chemical, Yara International)
25-02-2021 n/a
2
A. El-Hoshy
3
41,376 - expired 1,063,577
Level of
performance Threshold Target Maximum
25-02-2021 n/a
2
Peer group
ranking 40
th
percentile 67
th
percentile 90
th
percentile
H. Badrawi
3
40,315 - expired 1,036,304
% of award
vesting 25% 100% 150%
25-02-2021 n/a
2
The percentage of vesting for peer group ranking between threshold, target and maximum is
interpolated on a straight-line basis.
2019
N. Sawiris 116,002 - 116,002 2,500,000
Same as 2018
15-02-2022 07-02-2024
A. El-Hoshy
3
47,855 - 47,855 1,031,340 15-02-2022 07-02-2024
H. Badrawi
3
66,701 - 66,701 1,437,500 15-02-2022 07-02-2024
2020
N. Sawiris
135,354
-135,354
2,500,000The vesting of the 2020 PSU awards is solely based on the relative TSR ranking against
the selected peer group of 9 international fertilizer/ chemicals/gas companies: Celanese,
CF Industries*, Lanxess, Methanex*, Mosaic*, Nutrien*, Solvay, Westlake Chemical, Yara
International* (* denotes companies with a double weighting).
The percentage of vesting for peer group ranking is the same as for the 2018 and 2019
Awards.
07-02-2023 07-02-2025
A. El-Hoshy
3
71,061 - 71,061 1,312,500 07-02-2023 07-02-2025
H. Badrawi
3
77,829 - 77,829 1,437,500 07-02-2023 07-02-2025
M. de Vries 32,485 - 32,485 600,000
07-02-2023 07-02-2025
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116Strategy and
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and compliance
Financial
statements
Other
information
Performance Share Units Plan
continued
Award
cycle
Executive
Director
Outstanding
year-end 2020
Granted
conditional in
2021
Outstanding
year-end 2021
Value at grant
date in USD
1
Performance conditions Vesting date
End of
lock-up
period
N. Sawiris - 58,235 58,235 1,250,000
Following the amendment of the LTI Plan per 1 January 2021, the vesting of the 2021 PSU
awards is based on the following performance measures:
07-02-2024 07-02-2026
2021
Measure Weight Target definition
A. El-Hoshy
- 72,794 72,794 1,562,500
Relative TSR 60% Same as for 2020 PSU award
07-02-2024 07-02-2026
Operational
Excellence –
Plant reliability
15%
Improvement of Asset Utilization =
Onstream Efficiency x Capacity Efficiency
1% improvement per year on 3-year weighted reliability
average (based on Maximum Proven Capacity (MPC)
and % economic ownership) of plants.
H. Badrawi - 66,971 66,971 1,437,500
ESG –
Decarbonization
15%
Development, implementation and execution of
decarbonization plan. The decarbonization target is built
on OCI’s commitment to confirm the GHG reduction
targets and the development of the strategy to achieve
these targets. The aim is to have a clear decarbonization
plan including the required organizational structure and
implementation plan in place with projects underway,
decarbonization project investment criteria defined,
and quick wins achieved. Vesting will be dependent
on the achievement of key milestones. Assessment of
the target achievements will be at the discretion of the
Board.
07-02-2024 07-02-2026
M. de Vries - 32,612 32,612 700,000
ESG – Diversity
& Inclusion
10%
Increase percentage of women’s representation in
senior positions and initiatives to increase representation
of minorities.
For the 2021 PSU award, the target is set at an increase
of 5%. This 5% increase will be measured against the
2019 baseline, to result in a representation of women in
senior positions of 25.5% at the end of the performance
period.
07-02-2024 07-02-2026
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
The 2018 PSU awards vested at 0% on 25 February 2021.
3
Granted before appointment as Executive Director.
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information
Vesting of 2018 performance shares award
Based on the Performance Share Unit awards of 7 February 2018, conditional shares were
granted to the Executive Chair, CEO and CFO. The vesting of these shares was conditional
on OCI’s TSR performance in the three-year performance period ending 7 February 2021 and
continued employment. The vesting of these awards could not take place on the original vesting
date, 7 February 2021 as OCI was in a closed trading period. Hence, the awards vested at
the first trading day after the closed trading period, being 25 February 2021. Over the 3-year
performance period OCI’s TSR performance ranked 10th in the TSR peer group at the 25th
percentile. As a result, the award vested at 0% of target. The Nomination and Remuneration
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 2018 – 7 February
2021) and decided to make no adjustments.
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 the Executive Directors
(which have no further performance conditions attached). Their holding as a percentage of salary
is based on a share price of € 23.02 ($26.17) (the closing share price on 31 December 2021).
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 81,564,223
Majority shareholder in OCI
N.V.
A. El-Hoshy 80,848 169.29%
H. Badrawi 130,370 296.72%
M. de Vries 18,258 85.34%
1
Based on a share price of €23.02 on 31 December 2021.
Internal pay ratio
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 2021 is 44.50 for the CEO and on
average 32.8 for the Executive Directors. In 2020, these global internal pay ratios were 39.2
for the CEO and on average 32.8 for the Executive Directors. The increase of the internal pay
ratio compared to 2020 is mainly arising from the higher annual bonus, resulting from the strong
financial results and the extraordinary performance.
The next 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.
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information
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 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 OCI’s 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.
2021 2020 2019 2018 2017
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)
%
change
Executive Director’s Remuneration in USD
N. Sawiris,
Executive Chair
3,086,600 -22.4% 3,976,525 -31.9% 5,841,951 -7.1% 6,290,697 +29.9% 4,842,242 -7.7%
A. El-Hoshy,
CEO
4,555,423 +32.7% 3,432,976
1
n/a n/a n/a n/a n/a n/a n/a
H. Badrawi,
CFO
3,797,040 +17.8% 3,222,671 +25.6% 2,565,471 +7.0% 2,397,640 n/a 351,500
2
n/a
M. de Vries,
CLHCO
1,683,741 +31.0% 1,285,142 n/a 522,460
3
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 n/a n/a 5,600,665 +81.8%
Non-Executive Director’s Remuneration in USD
M. Bennett,
USA, Co-Chair
307,500 - 307,500 +2.1% 301,250 -15.5% 356,575 -16.8% 428,750 -34.4%
S. Schat,
NED, Vice-Chair
190,000 - 190,000 +4.1% 182,500 +14.1% 160,000 - 160,000 -
A. Montijn-Groenewoud,
NED
173,333 +3.5% 167,500 +8.9% 153,750 +11.8% 137,500 -2.7% 141,250 n/a
R.J. van de Kraats,
NED
182,500
- 182,500 +2.8% 177,500 +9.2% 162,500 - 162,500 -
G. Heckman,
USA
157,500 - 157,500 +2.4% 153,750 +9.8% 140,000 - 140,000 +1.4%
J. Guiraud,
FR
177,500 - 177,500 +2.9% 172,500 +9.5% 157,500 - 157,500 -
D. Welch,
USA
231,359
5
-6.5% 247,500 n/a 92,460
4
n/a n/a n/a n/a n/a
D. Fraser,
USA
170,000 - 170,000 n/a 98,710
6
n/a n/a n/a n/a n/a
H. van de Kerkhof,
GER
157,500 n/a 30,815
7
n/a n/a n/a n/a n/a n/a n/a
J. Ter Wisch,
NED
n/a n/a 82,411
8
n/a 172,500 +9.5% 157,500 -3.1% 162,500 -3.0%
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information
2021 2020 2019 2018 2017
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)
%
change
Performance at OCI
TSR performance
96.38 +46.4% 65.82 -16.2% 78.50 +5.3% 74.57 -15.3% 88.05 +26.8%
Average Employee Remuneration and Internal pay ratio’s
Average employee remuneration
global employee reference group
(FTE, Total Remuneration Costs)
99,927 7.3% 93,170 -2.2% 95,287
9,10
n/a n/a n/a n/a n/a
Internal pay ratio –
global employee r
eference group
44.5 13.5% 39.2
11
n/a
12
33.2
9,10
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 n/a n/a 112,040 -0.7% 122,843 n/a
Internal pay ratio –
EU+USA employee
reference group
n/a n/a n/a n/a n/a n/a 29.6 +19.4% 24.8 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 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
D. Welch was appointed as Non-Executive Director per May 2019.
5
D. Welch served on the Board of Fertiglobe plc (previously Fertiglobe Holding Ltd) as a delegate of OCI until 26 October 2021 and as of 27 October 2021 as independent Non-Executive Director.
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.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 (Performance Share Units).
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.
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Other
information
Implementation of our Remuneration Policy in 2022
The implementation of our Remuneration Policy as it currently stands, will result in the following
remuneration packages for our Executive Directors in 2022.
Role Executive Chair CEO CFO CLHCO
Remuneration in 2022
Annual base salary $1,000,000 $1,250,000 $1,150,000 $560,000
1
2022 Target Bonus
opportunity (as a % of
annual base salary)
n/a 75%-150% 60%-120% 60%-120%
2022 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.
2022 annual bonus performance measures
Performance measure and weighting
Financial
Metrics Adjusted EBITDA (40%)
Targets will be disclosed in the
2022 Annual Report
Sales Volumes (20%)
Targets will be disclosed in the
2022 Annual Report
HSE (15)%
Targets will be disclosed in the
2022 Annual Report
Strategic
and non-
financial
(25%)
HR-Taking People along
Ensure an engaged and inspired workforce, which is
essential to achieve maximal business performance. This
will be measured against objectives in three areas.
Engagement
Career Development
Onboarding
Securing execution of the strategic OCI Fuse project
OCI Fuse is the consolidation and replacement of the
underlying OCI Technology Landscape along with the
harmonization of key business practices across the wholly
owned OCI subsidiaries (excluding Fertiglobe). Given the
significant impact of this project, the Executive Directors will
be charged with securing the execution of this project. This
will be measured against objectives in four areas.
Operational
Financial
Security risk
Change management
Performance measures for 2022 PSU awards
For each performance period, the Nomination and Remuneration Committee has discretion to
select the performance measures for the PSU awards from a set of strategic initiatives. In doing
so, the Nomination and Remuneration Committee selects performance measures that are best
aligned to the company’s strategic priorities and long-term interests whilst ensuring that the
selected long-term performance measures do not overlap the performance measures for the
annual bonus. The performance measures selected for the 2022 PSU awards, as granted on 7
February 2022 are fully aligned to our strategic priorities, which include operational excellence,
business optimization, sustainable solutions and decarbonization and diversity & inclusion. Please
find further details on these performance measures in the table below:
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 levels for OCI’s relative TSR performance are set out in the Remuneration Policy. The
target levels for plant reliability, decarbonization and diversity & inclusion will be disclosed in the
2022 Remuneration Report.
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information
Extraordinary share award
To recognize and reward extraordinary performance, like the performance in 2021 and to promote
the share ownership of the Executive Directors, the Nomination and Remuneration Committee
proposes to amend the Remuneration Policy and introduce an Extraordinary Share Award.
Granting an Extraordinary Share Award will be at the discretion of the Board and will be reserved
to reward extraordinary performance outside targets set for the annual bonus and performance
share units plan. Extraordinary Share Awards can be made to the CEO, CFO and the CLHCO.
The Executive Chair is not eligible for the Extraordinary Share Award. Subject to approval by
the AGM, the proposed 2022 Extraordinary Share Award will be granted at the first trading day
after the AGM. The Shares will be granted against the price of the OCI Shares at the end of this
trading day. The Extraordinary Share Awards will consist of conditional OCI shares that will vest
after 3 years. There will be no performance conditions attached, though vesting will be subject
to continued engagement of the Executive Director. After vesting a two-year holding period will
apply. In as much as possible the other terms and conditions of the Extraordinary Share Award,
like the Change of Control clause, Good leaver treatment, Dividend Equivalents, Clawback and
Malus clause and the Sell-to-Cover provision, will be copied from the approved Executive Director
Performance Share Units Plan. The proposed 2022 Extraordinary Share Awards rewarding the
extraordinary performance of the Executive Directors in the year 2021 amounts to $700,000
for the CEO and CFO and $450,000 for the CLHCO. The Executive Chair is not eligible for an
Extraordinary Share Award.
Amendment of the Remuneration Policy
Next to the proposal to grant a 2022 Extraordinary Share Award, the Non-Executive Directors
– upon recommendation by the Nomination and Remuneration Committee – proposes to the
AGM to approve an amendment of the Remuneration Policy. It is proposed to introduce the
Extraordinary Share Award Plan to be included in the Remuneration Policy as a new long-term
compensation scheme, aligned to OCI's long-term value creation and promoting the share
ownership of the Executive Directors. All terms and conditions of the Extraordinary Share Award
are defined in the Extraordinary Share Award Plan. Granting an Extraordinary Share Award will
be reserved to reward extraordinary performance beyond and/or outside the targets set for the
annual bonus and Performance Share Units Plan. It will be at the discretion of the Board to grant
an Extraordinary Share Award and to determine the size of the Award following the Board's
assessment of the extraordinary performance.
2022 remuneration scenarios
The Nomination and 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 illustrate how much the current Executive Directors could receive under
different scenarios in 2022, 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 2022. 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 plus an additional 25% payment for the period he
serves as CEO of Fertiglobe next to his role as CEO of OCI. The CFO’s salary amounts to
$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.
2022 pay scenario analysis
Further to the pay scenario modelling conducted, the Nomination and Remuneration 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 Performance Share Units Plan
are adequate. The Nomination and Remuneration 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 67:33 in the threshold scenario and
27:73 in the maximum scenario.
REMUNERATION REPORT
CONTINUED
CFO
560
Minimum Threshold MaximumTarget
1,000
1,312
2,250
2,875
1,150
1,785
3,277
Salary Benets allowance
PSU
All gures $'000
Executive Chair
STI
CLHCO (80%)
869
1,596
2,282
Minimum Threshold MaximumTarget Minimum Threshold MaximumTarget
4,686
CEO
1,562
2,328
5,781
4,062
Minimum Threshold MaximumTarget
Fertiglobe salary
OCI N.V.
Annual Report 2021
122Strategy and
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information
Introduction
This 2021 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 2021 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 2021 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 109;
• 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
Enterprise Risk Management beginning on page 82;
• 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 108;
• 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 102;
• 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 103 and 104; 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 109.
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 2021 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 2021, and of OCI’s and its group companies’ state of affairs for the financial year
2021, as well as the principal risks and uncertainties that OCI faces.
DECLARATIONS
OCI N.V.
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123Strategy and
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Non-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 24.
• A description, including applied procedures and the results of its policy in relation to:
Compliance on page 92; and
throughout the sustainability and ERM sections of this Annual Report; and
described on pages 35-81.
Amsterdam, the Netherlands,18 March 2022
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
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Annual Report 2021
1256.
Financial
statements
OCI N.V.
Annual Report 2021
125
Consolidated Financial Statements
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Annual Report 2021
126Strategy and
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information
$ millions Note
31 December
2021
31 December
2020
Assets
Non-current assets
Property, plant and equipment (7) 5,543.5 6,244.3
Right-of-use assets (7) 248.2 279.4
Goodwill and other intangible assets (8) 485.7 486.5
Trade and other receivables (9) 33.6 3.5
Equity-accounted investees (10) 494.9 468.7
Financial assets at fair value through other comprehensive income (11) 19.2 30.0
Deferred tax assets (12) 207.7 0.8
Total non-current assets 7,032.8 7,513.2
Current assets
Inventories (13) 343.5 293.8
Trade and other receivables (9) 851.6 600.9
Income tax receivables (12) 3.4 2.8
Cash and cash equivalents (14) 1,580.3 686.3
Total current assets 2,778.8 1,583.8
Total assets 9,811.6 9,097.0
The notes on pages 132 to 178 are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT
Consolidated Financial Statements
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONTINUED
AS AT
$ millions Note
31 December
2021
31 December
2020
Equity
Share capital (15) 5.6 5.6
Share premium (15) 6,316.3 6,316.3
Reserves (16) 338.4 )
(384.0 )
(Retained earnings 4,851.8 )
(3,938.9 )
(Equity attributable to owners of the Company 1,999.0 1,131.7
Non-controlling interests (17) 1,509.2 1,540.1
Total equity 3,508.2 2,671.8
Liabilities
Non-current liabilities
Loans and borrowings (18) 3,290.2 4,226.9
Lease obligations (19) 237.5 248.6
Trade and other payables (20) 23.7 25.7
Provisions (21) 12.8 3.0
Deferred tax liabilities (12) 614.4 515.5
Total non-current liabilities 4,178.6 5,019.7
Current liabilities
Loans and borrowings (18) 510.6 189.7
Lease obligations (19) 39.7 43.6
Trade and other payables (20) 1,357.5 1,003.6
Provisions (21) 144.7 158.3
Income tax payables (12) 72.3 10.3
Total current liabilities 2,124.8 1,405.5
Total liabilities 6,303.4 6,425.2
Total equity and liabilities 9,811.6 9,097.0
The notes on pages 132 to 178 are an integral part of these consolidated financial statements.
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CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER
$ millions Note
2021 2020
Revenue (27) 6,318.7 3,474.1
Cost of sales (22) 3,062.0 )
(4,489.7 )
(Gross profit 1,829.0 412.1
Other income (23) 1.4 17.6
Selling, general and administrative expenses (22) 219.3 )
(266.4 )
(Other expenses (24) 23.4 )
(1.2 )
(Operating profit 1,562.8 187.0
Finance income (25) 34.6 212.5
Finance cost (25) 412.4 )
(308.8 )
(Net finance cost 199.9 )
(25)
(274.2 )
(Income from equity-accounted investees (net of tax) (10) 7.3 (36.7 )
Profit / (loss) before income tax 1,295.9 (49.6 )
Income tax (12) 44.5 )
(137.1 )
(Net profit / (loss) 1,158.8 (94.1 )
Other comprehensive income:
Items that are or may be reclassified subsequently to profit or loss
Movement in hedge reserve (16) 5.9
(16.9 )
Currency translation differences (16) 146.9 )
(51.8 )
(Currency translation differences from equity-accounted investees (10) 1.6
(2.2 )
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) 3.7 )
(10.8 )
(Other comprehensive income, net of tax 143.1 )
(81.7 )
(Total comprehensive income 1,077.1 (237.2 )
Profit / (loss) attributable to:
Owners of the Company 570.5 (177.7 )
Non-controlling interests (17) 588.3 83.6
Net profit / (loss) 1,158.8 (94.1 )
Total comprehensive income attributable to:
Owners of the Company 521.1 (282.1 )
Non-controlling interests (17) 556.0 44.9
Total comprehensive income 1,077.1 (237.2 )
Earnings / (loss) per share (in USD)
Basic earnings / (loss) per share (26) 2.719 (0.847 )
Diluted earnings / (loss) per share (26) 2.703 (0.847 )
The notes on pages 132 to 178 are an integral part of these consolidated financial statements.
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CONSOLIDATED 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 (15)
Non-controlling
interests
(17)
Total
equity
Balance at 1 January 2020 5.6 6,316.3 (237.8 ) (4,726.6 ) 1,357.5 1,461.2 2,818.7
Net profit / (loss) - - - (177.7 ) (177.7 ) 83.6 (94.1 )
Other comprehensive income
Total comprehensive income - - (104.4 ) (177.7 ) (282.1 ) 44.9 (237.2 )
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 (17) - - - 48.3 48.3 (59.6 ) (11.3 )
Share-based payments (15) - - - 8.0 8.0 - 8.0
Balance at 31 December 2020
Net profit - - - 570.5 570.5 588.3 1,158.8
Other comprehensive income
Total comprehensive income
Impact difference in profit sharing non-controlling interests (17) - - - - - 104.6 104.6
Dividend to non-controlling interests (17) - - - - - (788.1 ) (788.1 )
Treasury shares sold / delivered (16) - - 4.8 (4.8 ) - - -
Treasury shares acquired (16) - - (1.0 ) - (1.0 ) - (1.0 )
Acquisition of additional shares in EBIC (17) - - - 6.0 6.0 (44.4 ) (38.4 )
Sale of shares in Fertiglobe plc (17) - - - 332.7 332.7 141.0 473.7
Share-based payments (15) - - - 8.5 8.5 - 8.5
Balance at 31 December 2021
The notes on pages 132 to 178 are an integral part of these consolidated financial statements.
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CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER
$ millions Note
2021 2020
Net profit / (loss) 1,158.8 (94.1 )
Adjustments for:
Depreciation, amortization and impairment (7), (8) 891.6 592.2
Interest income (25) 4.4 )
(4.3 )
(Interest expense (25) 281.0 307.5
Net foreign exchange gain and others (25) 103.2 )
(2.5 )
(Fertiglobe business combination (2.2.1) - (13.3 )
Share in income of equity-accounted investees (10) 36.7
(7.3 )
Equity-settled share-based payment transactions (15) 8.5 8.0
Impact difference in profit-sharing non-controlling interests (17) 104.6 17.4
Income tax expense (12) 137.1 44.5
Changes in:
Inventories (13) 18.2
(41.7 )
Trade and other receivables (9) 120.4 )
(277.3 )
(Trade and other payables (20) 391.7 214.2
Provisions (21) 27.6
(1.8 )
Cash flows:
Interest paid 283.5 )
(209.2 )
(Lease interest paid (19) 8.6 )
(8.5 )
(Interest received 4.3 4.4
Income taxes paid (12) 25.4 )
(160.9 )
(Cash flow from operating activities 2,264.1 617.8
Investments in property, plant and equipment (7) 262.6 )
(247.8 )
(Investments in intangible fixed assets 0.6 )
(1.1 )
(Proceeds from sale of property, plant and equipment 2.7 -
Dividends from equity-accounted investees (10) 2.7 3.0
Cash flow used in investing activities 260.2 )
(243.5 )
(
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CONSOLIDATED STATEMENT OF CASH FLOWS
CONTINUED
FOR THE YEAR ENDED 31 DECEMBER
$ millions Note
2021 2020
Proceeds from borrowings (18) 2,248.3 2,070.4
Repayment of borrowings (18) 2,396.0 )
(3,186.1 )
(Payment of lease obligations (19) 37.3 )
(38.8 )
(Newly incurred transaction costs / call premium (18) 51.2 )
(48.9 )
(Purchase of treasury shares (16) -
(1.0 )
Dividends paid to non-controlling interests (15), (17) 43.2 )
(799.7 )
(Acquisition of additional shares in EBIC (17) -
(43.0 )
Proceeds from sale of shares in Fertiglobe plc (17) 461.1 -
Fees related to sale of shares in Fertiglobe plc (17) -
(14.1 )
Settlement FX derivatives (25) 45.6
(72.8 )
Net debt settlement business combination Fertiglobe (2.2.1) - 166.8
Cash flows used in financing activities 244.9 )
(1,495.0 )
(Net cash flow 525.6 112.7
Net increase in cash and cash equivalents 525.6 112.7
Cash and cash equivalents at 1 January 686.3 600.5
Effect of exchange rate fluctuations on cash held 26.9 )
(14.6 )
(Cash and cash equivalents at 31 December 1,197.3 686.3
Cash and cash equivalents in statement of financial position 1,580.3 686.3
Bank overdraft repayable on demand -
(383.0 )
Cash and cash equivalents in statement of cash flows 1,197.3 686.3
For non-cash movements in loans and borrowings and lease obligations, reference is made to notes 18 and 19, respectively.
The notes on pages 132 to 178 are an integral part of these consolidated financial statements.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR 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
18 March 2022. 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 2019
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 (USD 1,590.1 million) is less than the fair value of the identifiable net assets
(USD 1,603.4 million), resulting in a gain on purchase of USD 13.3 million which is recorded in the
profit or loss in 2020.
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.
As a result of the Fertiglobe IPO on 27 October 2021, certain changes were made to the indemnities as
initially agreed during the PPA. Reference is made to note 17 and note 21.
Consolidated Financial Statements
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR 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. Any new awarded projects will be sought
through a wholly-owned subsidiary of 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.
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). There have been no developments in the tax indemnity agreement during 2021.
2.2.3 Russia – Ukraine war
The recent conflict between Russia and Ukraine and the related sanctions are expected to impact
the global economy and markets. Based on our current knowledge and available information, we do
not expect that the conflict has an overall significant adverse impact on OCI’s consolidated financial
performance and we do not expect the conflict will have an impact on our ability to continue as a going
concern in the future.
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.
Consolidated Financial Statements
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
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.
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 and monetary items that form part of net investments
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.
Consolidated Financial Statements
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
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.
Net investment hedging
When a derivative instrument or a non-derivative financial liability is designated as the hedging
instrument in a hedge of a net investment in a foreign operation, the effective portion of changes in the
fair value of a derivative or foreign exchange gains and losses for a non-derivative is recognised in other
comprehensive income and presented in the translation reserve within equity. Any ineffective portion of
the changes in the fair value of the derivative or foreign exchange gains and losses on the non-derivative
is recognised immediately in profit or loss. The amount recognised in other comprehensive income is
fully or partially reclassified to profit or loss as a reclassification adjustment on disposal or partial disposal
of the foreign operation, respectively.
Cash flow hedge accounting
When a derivative is designated as a cash flow hedging instrument, the effective portion of changes
in the fair value of the derivative is recognised in other comprehensive income and accumulated in the
hedging reserve. The effective portion of changes in the fair value of the derivative that is recognised
in other comprehensive income is limited to the cumulative change in fair value of the hedged item,
determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in
the fair value of the derivative is recognised immediately in profit or loss.
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 impairment model requires the recognition of impairment provisions based on expected credit
losses (ECL) rather than only incurred credit losses as was 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.
Consolidated Financial Statements
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3.5 Financial instruments
(continued)
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 Equity attributable to owners of the Company
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.
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.
Consolidated Financial Statements
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
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
Software 1 - 5
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.
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.
Consolidated Financial Statements
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FOR THE YEAR ENDED 31 DECEMBER CONTINUED
3.11 Impairment of assets
(continued)
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.
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, as such the provision is classified as current.
Onerous contracts
Onerous contracts are contracts for which the unavoidable costs of meeting the obligations under
the contract exceed the economic benefits expected to be received under it. A provision for onerous
contracts is measured at the present value of the lower of the expected cost of terminating the contract
and the expected net cost of continuing with the contract, which is determined based on incremental
costs necessary to fulfil the obligation under the contract. Before a provision is established, the Group
recognises any impairment loss on the assets associated with that contract.
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.
Consolidated Financial Statements
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
3.14 Government grants
Government 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. When
the grant relates to an asset, it is recognized at the nominal amount of the grant and subsequently
recognized as income in equal amounts over the expected useful life of the related asset, if applicable.
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 EUAs are granted annually in advance by the Dutch Emission Authority. The amount of
EUAs granted is based on an estimate of CO
2
emissions in the Netherlands and the effective European
emission legislation. In arrears, the Group must refund allowances to the Dutch Emission Authority
based on actual CO
2
emissions during the year.
The grant of these allowances is within the scope of IAS 20 Government Grants. EUAs are accounted
for slightly different than the above accounting policy. Upon initial recognition, the EUA’s are recognized
as inventory at the nominal amount of the grant (nil). Concurrently, a liability is recognized for the
obligation to refund the allowances for CO
2
emissions during the compliance period. When no excess or
deficit is identified, no liability is recognized as the Group has sufficient EUAs to settle the liability.
The excess or deficit is calculated and recorded separately for each production facility. If 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. Purchased EUAs are recognized at cost and classified as
inventory. The cost of the purchased EUAs to settle the liability for emission allowances during any given
compliance period are recognized in cost of sales.
EUAs in excess of the liability to the Dutch Emission Authority that are controlled by OCI can be sold
for the benefit of the Group. Sales of EUAs in excess of the liability for emission allowances during any
given compliance period are recognized in cost of sales.
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.
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.
Consolidated Financial Statements
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
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. At each reporting date, the progress of
non-market conditions is measured and the expenses are recorded accordingly with true-ups recorded.
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.
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.
Consolidated Financial Statements
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
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 2021
The Group has applied the following amendments that became effective during 2021:
Interest rate benchmark reform
A fundamental reform of major interest rate benchmarks is being undertaken globally, including the
replacement of some interbank offered rates (IBOR), with alternative nearly risk-free rates. The Group’s
main IBOR exposure at the reporting date is USD LIBOR on its loans. The alternative reference rate for
LIBOR is the secured overnight financing rate (SOFR) which will be published in June 2023. The Group
plans to finish the process of amending contractual terms in response to IBOR reform by the end of
2022. Reference is made to note 6.3.
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. The most important
upcoming changes are:
Amendments to IAS 37 - Onerous Contracts
On 14 May 2020, the IASB issued 'Onerous Contracts — Cost of Fulfilling a Contract (Amendments
to IAS 37)' amending the standard regarding costs a company should include as the cost of fulfilling
a contract when assessing whether a contract is onerous. The amendments are effective for annual
reporting periods beginning on or after 1 January 2022.
The changes specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the
contract’. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract
(examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling
contracts (an example would be the allocation of the depreciation charge for an item of property, plant
and equipment used in fulfilling the contract).
The Group applies the amendments to contracts for which it has not yet fulfilled all its obligations at the
beginning of the annual reporting period in which the amendments are effective. Comparatives are not
restated. This amendment is not expected to have a material impact.
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
142Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR 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.
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. In the useful life
reassessment OCI also considers the impact of its ESG targets and of relevant climate risks, if identified
for a specific country or region. 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
OCI N.V.
Annual Report 2021
143Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
5. 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 assessment subsidiaries
Subsidiaries that OCI controls are fully consolidated from the date that control commences until the
date that control ceases. To determine whether OCI has control over its subsidiaries, an assessment of
control is required. This assessment is based on the requirements of IFRS 10 and evaluates whether
OCI is exposed or has rights to variable returns from its involvement with the investee and whether OCI
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. In certain circumstances,
the control assessment may require OCI to evaluate the effect of ownership structures, contractual
clauses and other arrangements that could have an impact on the assessment of control. The
significance of this evaluation is inversely correlated with OCI’s shareholding in the subsidiary.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
144Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
5. Critical accounting judgment, estimates and assumptions
(continued)
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.
6. 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 of Directors 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 of Directors 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 2021 , 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 200.0 million (USD 224.9 million). As per 31 December 2021 an amount of EUR 200.0 million
(USD 224.9 million) of trade receivables were transferred.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
145Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
6.1 Credit risk
(continued)
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
2021 2020
Trade and other receivables (9)
885.2
604.4Financial assets at fair value through other comprehensive income
(11)
19.2
30.0Cash and cash equivalents (14)
1,580.3
686.3Total
2,484.7
1,320.7The maximum exposure to credit risk for trade and other receivables by geographic region is as follows:
$ millions
2021 2020
Middle East and Africa
175.0
192.0Asia and Oceania
216.4
18.5Europe
301.4
269.0Americas
192.4
124.9Total
885.2
604.4The maximum exposure to credit risk for cash and cash equivalents by geographic region is as follows:
$ millions
2021 2020
Middle East and Africa
899.1
535.0Europe
462.2
17.6Americas
219.0
133.7Total
1,580.3
686.36.2 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 2021
$ 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)
3,800.8 4,311.1 597.6 3,112.6 600.9
Lease obligations (19)
277.2 484.9 35.7 86.0 363.2
Trade and other payables (20)
1,368.4 1,368.4 1,345.5 22.5 0.4
Derivatives (20)
12.8 12.8 12.0 0.8 -
Total
5,459.2 6,177.2 1,990.8 3,221.9 964.5
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
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
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 1 year’. The future obligations will be managed by the future incoming cash from operations,
currently available non-restricted cash and cash equivalents of USD 1,439.5
million and unused
amounts on credit facility agreements in the amount of USD 800.0 million, reference is made to note 18
'Undrawn bank facilities'.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
146Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
6.2 Liquidity risk
(continued)
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 activities were completed during 2021 to optimize the Group’s finance cost
and enhance its cashflow up-streaming to OCI N.V.
• On 1 February 2021, Iowa Fertilizer Company LLC redeemed the outstanding principal amount of the
5.875% USD 147.2 million of Iowa Finance Authority Midwestern Disaster Area Revenue Refunding
Bonds (Iowa Fertilizer Company Project), Series 2016, due 2026 and 2027.
• On 8 April 2021, OCI N.V. redeemed 10% of the 5.25% Senior Secured Notes due 2024 and 10% of
its 4.625% Senior Secured Notes due 2025, each at a redemption price of 103%. Total redemption
amounts to USD 60 million and USD 40 million, respectively.
• On 14 August 2021, Fertiglobe obtained a USD 1.4 billion financing arrangement, consisting of a USD
900 million bridge loan at LIBOR +105 bps with an 18-month maturity (extendable for another 12
months) with an accordion facility of USD 200 million. Furthermore, Fertiglobe obtained a USD 300
million Revolving Credit Facility maturing in 2026 at an interest rate of LIBOR +175 bps.
were used to repay EFC and Fertiglobe outstanding loans and to partially fund a dividend of USD 850
million to Fertiglobe shareholders (OCI’s share is USD 493 million and USD 357 million was distributed
to ADNOC).
• On 1 November 2021, OCI N.V. redeemed all of the aggregate principal amount of the outstanding
USD 540 million 5.25% Notes, at a redemption price of 102.625%.
• On 8 November 2021, OCI N.V. partially redeemed EUR 400 million of the aggregate principal amount
of the outstanding EUR 700 million 3.125% Senior Secured Notes due 2024, at a redemption price of
101.5625%.
• On 20 December 2021, OCI N.V. redeemed all of the aggregate principal amount (EUR 300 million)
of the outstanding 2024 EUR Notes, at a redemption price of 101.5625%. Furthermore, OCI N.V.
redeemed 10% of its 3.625% Senior Secured Notes due 2025 ("2025 EUR Notes") and 10% of its
4.625% Senior Secured Notes due 2025 ("2025 USD Notes"), or a total redemption of USD 40 million
and USD 36 million of the aggregate principal outstanding amounts of the 2025 EUR Notes and 2025
USD Notes, respectively, each at a redemption price of 103%.
• On 29 December 2021, Iowa Fertilizer Company LLC redeemed the remaining balance of USD 40
million on the outstanding principal amount of the Iowa Finance Authority Midwestern Disaster Area
Revenue Refunding Bonds (Iowa Fertilizer Company Project), Series 2019 at a redemption price of
101.5%.
For an overview of all loans and borrowings, reference is made to note 18.
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.
The Group is exposed to foreign currency risk arising in separate ways:
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 when Group entities enter into
foreign currency denominated transactions. 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 2021 was USD 142.6 million (2020: USD 65.9 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 and Fertil has
esposure to fluctuations in the USD / AED echange rates.
Foreign exchange translation risk
The Group is exposed to the translation of foreign currency denominated monetary assets and liabilities.
The currencies concerned are the Euro and the Algerian dinar.
These exposures are managed by the Group's treasury function, which may hedge 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 matching the remaining currency of debt with available
cashflows in the respective currency. As per 31 December 2021 there were no foreign currency
derivatives outstanding (2020: USD 1,005.7 million) related to the exposure of foreign currency
denominated monetary assets and liabilities.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
147Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
6.3 Market risk
(continued)
The summary of balances of the Group’s exposure to foreign exchange translations, where there
is exposure for monetary items denominated in foreign currencies which differ from their functional
currencies, including intercompany balances, is as follows:
At 31 December 2021
$ millions USD EUR EGP
Trade and other receivables
20.6 6.3 93.1
Trade and other receivables intercompany
1,980.6 67.6 0.3
Trade and other payables
(10.5) (11.4) (8.0)
Trade and other payables intercompany
(161.2) (20.0) (0.5)
Loans and borrowings
(1,107.0) - -
Loans and borrowings intercompany
(1,212.6) (123.1) -
Provisions
- - (120.8)
Cash and cash equivalents
411.6 13.9 24.0
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
The Algerian dinar is not included in the above table of foreign exchange translation 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
2021
Average
2020
Closing
2021
Closing
2020
Euro
1.1828
1.14181.1370
1.2225Egyptian pound
0.0637
0.06320.0636
0.0635Algerian dinar
0.0074
0.00790.0072
0.0076The 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 2021
$ millions
Change in
FX rate
Effect on profit
before tax
Effect on
equity
EUR - USD
5 percent 1.9 31.0
(5) percent (1.9) (31.0)
EGP - USD
3 percent (0.4) -
(3) percent 0.4 -
DZD - USD
3 percent 21.9 -
(3) percent (21.9) -
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) -
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 benchmark reform
A fundamental reform of major interest rate benchmarks is being undertaken globally, including the
replacement of some interbank offered rates (IBOR), with alternative nearly risk-free rates. The Group’s
main IBOR exposure at the reporting date is USD LIBOR on its loans. The alternative reference rate
for LIBOR is the secured overnight financing rate (SOFR). The Group plans to finish the process of
amending contractual terms in response to IBOR reform by early 2022.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
148Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
6.3 Market risk
(continued)
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 entered into interest rate derivatives
with a notional amount of USD 125 million (2020: nil) to manage the interest rate risk on floating rate
instruments and the refinancing of fixed rate borrowings.
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
2021 2020
Effect on profit before tax for the coming year +100 bps
(17.9)
(6.6)- 100 bps
17.9
6.6The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently
observable market data, showing a higher volatility compared to prior years. The increase is mainly
attributable to the Bridge Loan financing obtained by Fertiglobe plc in 2021. 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 2022 gas
price risk is reduced by the Group to an extent of 25% (including both physical pricings and financial
hedges).
The outstanding gas hedges in MMBtu as per 31 December 2021 for the years 2022-2024 are:
• Flat priced contracts 15.8
million (2020: 18.4 million);
• Options (delta equivalent) 14.6 million (2020: 19.9 million);
• Basis Swaps 0.1 million (2020: 11.0 million)
For the entities that are impacted by changes in natural gas prices during FY 2022, a change in the
average natural gas prices by USD 1 per MMBtu would impact the total annual cost of sales by USD
91.6 million, excluding the positive impact of our different hedges.
European Emission Allowance
During the year, the Group has generated additional liquidity by selling EUAs to the market. This
generated total net proceeds of USD 116.5 million (2020: USD 82.8 million) resulting from the sale and
repurchase of EUAs. Included in the net proceeds received, a gross amount of USD 133.8 million (2020:
nil) was recognized in cost of sales related to the sale of excess EUAs.
When EUAs are sold for cash management purposes, a liability is recognized for the obligation to refund
the allowances for CO
2
emissions during the compliance period. This liability is subsequently measured
at fair value. The total liability recorded as per 31 December 2021 amounts to USD 116.2 million (2020:
USD 99.0 million).
To manage the fair value risk of the EUA liability, the Group entered into financial hedges to purchase
1.3 million EUAs in order to meet its commitment to the Dutch Emission Authority. As per 31 December
2021, the fair value of these forward contracts amounts to USD 42.7 million (2020: USD 3.1 million).
The group does not apply hedge accounting to these contracts.
Categories of financial instruments:
31 December 2021
$ millions Note
Loans and
receivables /
payables at
amortized cost
Derivatives
at fair value
Financial assets
at fair value
through other
comprehensive
income
Assets
Trade and other receivables (9)
831.8 53.4 -
Financial assets at fair value through other
comprehensive income (11)
- - 19.2
Cash and cash equivalents (14)
1,580.3 - -
Total
2,412.1 53.4 19.2
Liabilities
Loans and borrowings
(18)
3,800.8 - -
Trade and other payables
(20)
1,252.2 129.0 -
Total
5,053.0 129.0 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
149Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
6.3 Market risk
(continued)
31 December 2020
$ millions Note
Loans and
receivables /
payables at
amortized cost
Derivatives
at fair value
Financial assets
at fair value
through other
comprehensive
income
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)
4,416.6Trade and other payables 107.7 -
(20)
921.6 Total 5,338.2 107.7 -
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 2.8 million (2020: USD 2.9 million), the investment
in the Infrastructure and Growth Capital Fund of USD 2.8 million
(2020: USD 6.3 million) was recognized
as level 2 as the valuation is partially derived from listed shares.
The investment in Notore Chemical of
USD 13.6
million (2020: USD 20.8 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 2021 and 2020, 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
2021 2020
Loans and borrowings (18)
3,800.8
4,416.6Less:
cash and cash equivalents (14)
1,580.3
686.3Net debt
2,220.5
3,730.3Total equity
3,508.2
2,671.8Net debt to equity ratio at 31 December
0.63
1.40Loans and borrowings include an amount of USD 383.1 million related to the bank overdraft facility
of OCI N.V. The amount drawn on this facility is also included in cash and cash equivalents and held
by other entities within the Group. These amounts cannot be offset as they do not comply with the
offsetting requirements for financial instruments.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
150Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
7. 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 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 1 January 2020 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 60.4 146.2 10,286.6
Accumulated depreciation (185.7) (3,813.7) (42.9) - (4,042.3)
At 31 December 2020 566.2 5,514.4 17.5 146.2 6,244.3
Movements in the carrying amount:
Additions
2.0 25.1 4.8 203.3 235.2
Disposals
- (2.4) - - (2.4)
Depreciation
(24.8) (531.8) (3.5) - (560.1)
Impairment
(1.3) (244.7) (0.3) (30.0) (276.3)
Transfers
0.6 163.0 1.2 (164.8) -
Reclassification to inventory
- (19.0) - - (19.0)
Asset retirement obligation
- - 8.7 - 8.7
Effect of movement in exchange rates
(3.2) (76.1) (0.7) (6.9) (86.9)
At 31 December 2021
539.5 4,828.5 27.7 147.8 5,543.5
Cost
748.6 9,208.8 73.8 147.8 10,179.0
Accumulated depreciation
(209.1) (4,380.3) (46.1) - (4,635.5)
At 31 December 2021
539.5 4,828.5 27.7 147.8 5,543.5
As at 31 December 2021, the Group has land with a carrying amount of USD 35.3 million (2020: USD
35.3 million).
The transfers of USD 164.8 million (2020: USD 233.5 million) are assets under construction that were
put into use during the year. Transfers mainly relate to Iowa Fertilizer Company for USD 48.3 million, OCI
Nitrogen for USD 21.4 million and Ruwais Fertilizer Industries for USD 77.5 million. The additions of USD
235.2 million mainly relate to OCI Nitrogen for USD 62.0 million, Iowa Fertilizer Company for USD 44.8
million and Ruwais Fertilizer Industries for USD 43.8 million. The effect of movement in exchange rates
in 2021 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 5.3% and the Euro decreased by 7.0% against the US dollar in 2021. The capitalized
borrowing costs during the year ended 31 December 2021 amounts to zero (2020: USD 0.6 million).
The capitalized borrowing costs for 2020 fully related to OCI Beaumont and 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 1,835.9 million (2020: USD 1,920.6 million) have been pledged
as security for external loans and borrowings of IFCo. Reference is made to note 18.
Impairment BioMCN
During 2021 an impairment loss of USD 264.5 million and USD 13.8 million was recognized in cost of
sales on the property, plant and equipment and right of use assets, respectively, of BioMCN, an entity
included in our Methanol EU segment. Over the course of Q3 and Q4 ‘21, European gas prices reached
historically high price levels, which has a significantly negative impact on the financial performance of
BioMCN. In response to the high gas price environment, management decided to temporarily shut
down the production facilities at BioMCN from June 2021 onwards. The shutdown of the production
facilities was initiated to avoid significant contribution losses caused by the historically high gas prices.
Operational plans are in place to quickly respond to changes in market prices.
To determine the impairment loss, the recoverable amount of BioMCN was estimated based on value
in use and was deemed to be zero. The pre-tax discount rate used in the estimate is 4.6% (2020:
9.0%). The discount rate in 2021 is favorably impacted by income tax benefits caused by operating
losses in the valuation. The key assumptions included in the estimation of the recoverable amount are
the forecasted methanol prices and the forecasted natural gas prices. These assumptions are derived
from analyst publications and / or published market prices available on 31 December 2021. Based
on the impairment test performed, the property, plant and equipment of BioMCN was fully impaired.
The impairment is solely attributable to the unprecedented increase in forecasted natural gas prices in
Europe, combined with a weak correlation to forecasted methanol sales prices and is not the result of
operational decisions.
The impairment model is especially sensitive to changes to assumptions in the terminal value period of
the model. An increase or decrease of 1% in the forecasted gas price in the terminal value period results
in USD 33.2 million respective change in the value in use and an increase or decrease of 1% in the
forecasted price of methanol in the terminal value period results in USD 45.6 million respective change
in the value in use.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
151Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
7. Property, plant and equipment and right-of-use assets
(continued)
Right-of-use assets:
$ millions
Note
Land and
buildings
Plant and
equipment
Fixtures and
fittings Total
At 1 January 2020 133.6 88.3 55.6 277.5
Movements 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
(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
Movements in the carrying amount:
Additions
18.7 12.9 1.7 33.3
Modifications
1.0 3.3 - 4.3
Disposals
(2.4) (2.7) - (5.1)
Depreciation
(9.2) (22.4) (9.8) (41.4)
Impairment
(3.9) (9.9) - (13.8)
Effect of movement in exchange rates
(6.2) (2.3) - (8.5)
At 31 December 2021
145.8 60.7 41.7 248.2
The additions of USD 33.3 million mainly relate to OCI Nitrogen for USD 18.2 million and Sorfert for
USD 6.0 million. The effect of movement in exchange rates of USD 8.5 million in 2021 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.
8. Goodwill and other intangible assets
$ millions Goodwill
Licenses and
trademarks
Other
intangible
assets Total
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 1 January 2020 599.0 0.3 0.5 599.8
Movements in the carrying amount:
Additions - - 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
Movements in the carrying amount:
Additions
- - 1.1 1.1
Amortization
- - (0.2) (0.2)
Effect of movement in exchange rates
(1.7) - - (1.7)
At 31 December 2021
484.2 - 1.5 485.7
Cost
1,807.1 74.0 6.5 1,887.6
Accumulated amortization and impairment
(1,322.9) (74.0) (5.0) (1,401.9)
At 31 December 2021
484.2 - 1.5 485.7
Goodwill
Goodwill has been allocated to the cash generating units as follows:
Cash generating units
$ millions
Reporting segment
2021
2020Egyptian Fertilizers Company (‘EFC’) Fertiglobe
440.0
440.0OCI Beaumont Methanol US
23.0
23.0OCI Nitrogen Nitrogen Europe
21.2
22.9Total
484.2
485.9NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
152Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
8. Goodwill and other intangible assets
(continued)
Licenses 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 2022 to
2026 (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 2.02% was used. The estimated cash flows are
discounted using a present value technique.
The following rates were applied in performing the impairment test:
Percentage
2021 2020
EFC OCI Beaumont OCI Nitrogen EFC OCI Beaumont OCI Nitrogen
Pre-tax discount rate 8.30% 8.74%
12.62% 7.23% 7.94%
11.54%Perpetual growth rate 1.45% 1.45%
2.02% 2.02% 2.02%
1.45%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
2021 2020
Trade receivables (net)
577.2
271.3
271.3
Loans and trade receivables due from related parties (note 30)
5.0
58.5
58.5
Prepayments
57.6
66.2
66.2
Other tax receivables
116.9
112.2
112.2
Supplier advanced payments
31.2
30.9
30.9
Commodity and natural gas derivatives
10.7
16.0
16.0
EUA derivatives (note 6.3)
42.7
-
-
Foreign currency derivatives
-
3.3
3.3
Other receivables
43.9
46.0
46.0
Total
885.2
604.4
604.4
Non-current
33.6
3.5
3.5
Current
851.6
600.9
600.9
Total
885.2
604.4
604.4
In 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 200.0 million (USD 224.9 million) (2020: EUR 180.0
million). As per 31 December 2021 an amount of EUR 200.0 million (2020: EUR 122.6 million) of trade
receivables had been 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’. USD 53.1 million is related to paid
VAT to be collected in various jurisdictions.
The carrying amount of ‘Trade and other receivables’ as at 31 December 2021 approximates its fair
value.
The aging of current trade receivables at the reporting date were as follows:
$ millions
2021 2020
Neither past due nor impaired
559.7
223.2Past due 1 - 30 days
14.2
42.4Past due 31 - 90 days
1.8
3.4Past due 91 - 360 days
1.2
1.5More than 360 days
0.3
0.8Total
577.2
271.3NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
153Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
9. Trade and other receivables
(continued)
Management believes that the unimpaired amounts that are past due by more than 30 days (USD 3.3
million) 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
2021 2020
At 1 January
468.7
506.9Share in income
7.3
(36.7)Investment Rainbow Holdco
1
23.6
-
Intercompany profit elimination on upstream transactions
-
(0.1)Dividends
(2.5)
(3.0)Effect of movement in exchange rates
(2.2)
1.6At 31 December
494.9
468.7Joint ventures
1.1
1.1Associates
493.8
467.6Total
494.9
468.71
Rainbow Holdco B.V. was acquired on 26 June 2021. Rainbow Holdco B.V. holds a 50%
shareholding in Utility Support Group ('USG') B.V.
(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
White Rock Insurance PCC Ltd. Associate OCI N.V. Holding The Netherlands 5.0
Sitech Manufacturing Services C.V. Associate OCI Nitrogen B.V. The Netherlands 35.0
Sitech Services B.V. Associate OCI Nitrogen B.V. The Netherlands 23.0
Rainbow Holdco B.V. Associate OCI Nitrogen B.V. The Netherlands 43.0
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
(iii) The following table summarizes the financial information of OCI’s associates and joint ventures
(on a 100% basis):
$ millions
2021 2020
Associates
Joint
ventures Total Associates
Joint
ventures Total
Non-current assets
2,161.8 - 2,161.8
2,106.9 1.2 2,108.1
Current assets 2.8 315.3
315.0 15.5 330.5
312.5Non-current
liabilities - (1,154.8)
(1,121.4) (8.7) (1,130.1)
(1,154.8)Current liabilities (1.9) (293.3)
(323.1) (4.5) (327.6)
(291.4)Net assets 2.1 975.3
1,032.3 2.3 1,034.6
973.2Income 34.9 839.8
867.3 27.2 894.5
804.9Expenses (36.6) (906.4)
(844.7) (27.0) (871.7)
(869.8)Net (loss) / profit (1.7) (66.6)
22.6 0.2 22.8
(64.9)(iiii) The following chart summarizes the financial information of significant associates (on a 100% basis):
Firewater LLC
(Natgasoline)
Sitech
Services B.V.
$ millions
2021 2020 2021 2020
Non-current assets
1,973.8
1,977.2124.4
128.9Current assets (excluding cash and cash equivalents)
108.7
122.630.0
31.1Cash and cash equivalents
52.3
3.220.3
35.1Non-current liabilities
(1,050.8)
(1,078.2)(70.6)
(76.7)Current liabilities
(178.4)
(119.1)(44.6)
(55.9)Net assets
905.6
905.759.5
62.5Group’s share of net assets
452.8
452.813.7
14.4Revenues
319.5
256.2222.3
204.3Depreciation
(157.4)
(173.3)(13.8)
(13.3)Interest income
-
0.1-
-Interest expense
(56.1)
(62.9)(1.3)
(1.4)Profit / (loss) before taxes
(0.4)
(78.2)17.4
19.4Tax expense
-
-(5.0)
(6.1)Profit / (loss) after taxes
(0.4)
(78.2)12.4
13.3Other comprehensive income
-
--
-Total comprehensive income
(0.4)
(78.2)12.4
13.3Group’s share in total comprehensive income
(0.2)
(39.0)2.8
3.1Dividends
-
-11.0
9.1NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
154Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
10. Equity-accounted investees
(continued)
Included 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 based. The Chemelot site is also used by other
companies.
11. Financial assets at fair value through other comprehensive income
$ millions
2021 2020
Infrastructure and Growth Capital Fund LP (UAE)
2.8
6.3Notore Chemical Industries (Mauritius)
13.6
20.8Orascom Construction PLC (UAE)
2.8
2.9Total
19.2
30.0Non-current
19.2
30.0Current
-
-Total
19.2
30.0The 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
2021 2020
Current tax
(242.5)
(18.3)Deferred tax
105.4
(26.2)Total income tax reported in profit or loss
(137.1)
(44.5)Current tax expense
$ millions
2021 2020
Current year
(222.5)
(27.1)Minimum tax requirements
(9.6)
-Dividend withholding tax
(10.6)
7.8Changes in estimates relating to prior years
0.2
1.0Income tax benefit expense reported in profit or loss
(242.5)
(18.3)Deferred tax expense
$ millions
2021 2020
Origination and reversal of temporary differences
(60.5)
74.3Movement in uncertain tax positions (note 12.4)
(92.7)
(30.4)Changes in tax rates
-
(4.2)Recognition of previously unrecognized tax assets (note 12.4)
264.7
2.9Unrecognized tax assets
(0.1)
(56.6)Dividend withholding tax
(6.0)
(12.2)Income tax benefit / (expense) reported in profit or loss
105.4
(26.2)12.2 Other comprehensive income
$ millions
2021 2020
Cash flow hedges, effective portion of changes in fair value
4.8
(1.9)Income tax benefit / (expense) reported in OCI
4.8
(1.9)NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
155Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
12.3 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 26.5%, 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
2021 % 2020 %
Profit / (loss) before income tax
1,295.9
(49.6)Enacted income tax rate in the
Netherlands
25%
25%
Tax benefit / (expense) calculated at
the enacted Dutch tax rate
(324.0) (25.0)
12.4 25.0
Effect of tax rates in foreign jurisdictions 19.8
40.1 3.1
9.8Expenses non-deductible (58.1)
(58.5) (4.5)
(28.8)Income not subject to tax 38.3
123.2 9.5
19.0Adjustments prior years 2.0
0.2 -
1.0Change in tax rates (8.4)
- -
(4.2)Recognition of previously unrecognized
tax assets 5.8
264.7 20.4
2.9Unrecognized tax assets (114.1)
- -
(56.6)Unrecognized temporary differences -
(65.6) (5.1)
-Dividend withholding tax 15.7
(16.6) (1.3)
7.8Minimum tax requirements -
(9.6) (0.7)
-Uncertain tax positions (15.1)
(92.7) (7.1)
(7.5)Other (0.6)
1.7 0.1
(0.3)Total income tax in profit or loss (89.7)
(137.1) (10.6)
(44.5)The Group’s consolidated effective tax rate in respect of continuing operations for the period ended 31
December 2021 was 10.6% (2020: -89.7%). The change in effective tax rate was caused mainly by the
following factors:
• In 2020, the Group reported a consolidated loss before tax of USD 49.6 million whereas in certain
tax jurisdictions taxable profits were realized and tax expenses were recognized accordingly. As a
consequence, on a consolidated level, this resulted in a negative effective tax rate. In 2021 profitability
increased substantially resulting in taxable profits for the majority of the tax jurisdictions in which the
Group operates. This is mainly driven by a recovery in sales prices for Fertilizer products.
Compared to the statutory tax rate applicable in the Netherlands (25%) the following elements are the
main drivers for the lower effective tax rate of 10.6%:
• The recognition of a deferred tax asset related to net operating losses at IFCo resulted in a significant
deferred tax benefit. Reference is made to note 12.4 for a more detailed description of this event.
• Higher profits generated by the export activities of Sorfert and increased profitability of EBIC in 2021
resulted in a lower effective tax rate compared to the same period in 2020.
• As a result of the increased profitability noted in 2021, net operating losses that were previously
unrecognized could be utilized, resulting in a decrease of the effective tax rate.
• The before mentioned was partially offset by the Sorfert reinvestment case and other uncertain
tax positions (refer to note 12.4), unrecognized temporary difference resulting from the BioMCN
impairment, an increase in non-deductible expenses, an increase in dividend withholding taxes and
higher minimum tax requirements.
12.4 Deferred income tax assets and liabilities
Changes in deferred tax asset and liabilities (net):
$ millions
2021 2020
At 1 January
(514.7)
(483.7)
(483.7)
Profit or loss
105.4
(26.2)
(26.2)
Effect of movement in exchange rates
2.6
(4.8)
(4.8)
At 31 December
(406.7)
(514.7)
(514.7)
Recognized deferred tax assets and liabilities:
Assets Liabilities Net
$ millions
2021 2020 2021 2020 2021 2020
Intangible assets
82.9
81.6(62.9)
(62.7)20.0
18.9Property, plant and equipment
-
-(587.1)
(610.7)(587.1)
(610.7)Inventory
0.4
1.9(14.9)
(3.3)(14.5)
(1.4)Investment in partnership
-
-(75.2)
(89.6)(75.2)
(89.6)Trade and other receivables
0.2
-(0.3)
(0.4)(0.1)
(0.4)Loans and borrowings
31.3
52.0(0.6)
(1.1)30.7
50.9Trade and other payables
12.9
12.4-
-12.9
12.4Provisions
-
-(3.0)
(6.3)(3.0)
(6.3)Uncertain tax positions
-
-(148.6)
(57.6)(148.6)
(57.6)Undistributed earnings
-
-(21.7)
(15.6)(21.7)
(15.6)Operating losses carry forward
and tax credits
379.9
184.7-
-379.9
184.7Total
507.6
332.6(914.3)
(847.3)(406.7)
(514.7)Netting of fiscal positions
(299.9)
(331.8)299.9
331.8-
-Amounts recognized in
the Statement of Financial
Position
207.7
0.8(614.4)
(515.5)(406.7)
(514.7)NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
156Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
12.4 Deferred income tax assets and liabilities
(continued)
The deferred tax asset relating to intangible assets mainly related to capitalized start-up costs for IFCo
for USD 51.3 million. These costs are capitalized and amortized for tax purposes and were expensed
for book purposes. 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 247.7 million), IFCo (USD 245.9 million), EFC
(USD 64.3 million) and OCI Nitrogen (USD 20.5 million). The uncertain tax position of USD 148.6 million
is disclosed below. Furthermore, the deferred tax liability ‘investment in partnership’ (USD 72.5 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 496.6 million, for which an
amount of USD 188.9 million has not been recognized. The losses carry forward mainly relate to the
US operations (USD 124.4 million) and Egyptian operations (USD 63.5 million). Tax credits are available
amounting to USD 72.2 million mainly relating to the US operations.
Recognition of previously unrecognized tax losses
Due to IFCo's improved profitability in the current year, the realizability of the available deferred
tax benefits was assessed. Both positive and negative evidence was considered in assessing the
realizability of the available deferred tax benefits, such as recent historical losses, improved profitability
in the current year, higher forecasted taxable profitability and the carryforward period of the tax losses
available (which is for a significant part of the losses indefinitely). After assessing these factors, the
Company determined that convincing evidence is available that the deferred tax benefit of the tax losses
will be realized in the foreseeable future.
During 2021, a deferred tax asset related to net operating losses was recognized at Iowa Fertilizer
Company (IFCo). The recognition resulted in a net deferred tax asset of USD 200.3 million and therefore
is a significant component of the 2021 tax expense. All available net operating losses and tax credits
available for IFCo were recognized in 2021.
In addition to the losses recognized for IFCo, the BioMCN tax group was able to utilize all available
tax losses in 2021 due to strong financial performance of OCI Fuels and the sale of excess EUAs of
BioMCN.
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 2021, the Group recorded uncertain tax positions to an amount of USD 148.6
million related to taxable profits, which is classified as a deferred tax liability. These uncertain tax
positions are classified as deferred tax since settlement is not expected within 12 months after the
reporting period. In addition to this, the Group recorded USD 40.4 million of current uncertain tax
positions. 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.
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.
Unrecognized tax assets
Expiration scheme of gross unrecognized carry forward tax losses, tax credits and deductible temporary
differences:
2021
$ 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
28.5 113.7 137.1 - - -
279.3
Tax losses and tax
credit carry forwards
46.8 204.5 7.3 - - 592.5
851.1
Tax assets –
unrecognized
75.3 318.2 144.4 - - 592.5 1,130.4
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
67.2
309.7
309.7
128.9
128.9
-
-
359.2
359.2
532.1
532.1
1,397.1
1,397.1
Tax assets –
unrecognized
67.2
67.2
309.7
309.7
128.9
128.9
-
-
359.2
359.2
532.1
532.1
1,397.1
1,397.1
The above unrecognized temporary differences, tax losses and tax credit carry forwards 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
157Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
12.4 Deferred income tax assets and liabilities
(continued)
Changes in income tax receivables and payables:
$ millions
2021 2020
At 1 January
(7.5)
(5.6)Profit or loss
(242.5)
(27.1)Changes in estimates relating to prior years
0.2
1.0Other comprehensive income
4.8
(1.9)Payments
171.6
25.4Reversal of uncertain tax position
1.1
-Effect of movement in exchange rates
3.4
0.7At 31 December
(68.9)
(7.5)Income tax receivable
3.4
2.8Income tax payables
(72.3)
(10.3)Total
(68.9)
(7.5)Sorfert reinvestment case
On 29 December 2020 the Large Multinationals Directorate of the Algerian Tax Authorities (“DGE”)
issued a letter to Sorfert in which its initial claim of DZD 7,296 million (USD 53.3 million) was maintained
relating to the alleged non-compliance with the reinvestment obligations under a tax exemption as
granted in 2014 by the Agency Nationale de Developpement de l’Investissement (“ANDI”). 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 required Sorfert to repay the full assumed tax benefit it enjoyed
in relation herewith. On 1 February 2021, Sorfert appealed to this decision and as part of the appeal
process made an initial payment of DZD 2,189 million.
On 31 October 2021, the appeal of Sorfert to the initial claim was rejected by the Internal Appeals
Committee of the DGE (and the total exposure was increased with a 25% penalty) and it had to pay
DZD 1,824 million (20% of the initial claim and penalties added with penalties on the amount already
paid in February 2021). Although Sorfert is of the opinion that it has complied with its reinvestment
obligations, the DGE applied a different interpretation of the reinvestment law. Since there is no detailed
guidance on the interpretation, the ability to firmly assess the technical merits of this case is limited. Due
to this lack of detailed guidance and negative outcome of the first appeal, management is currently of
the opinion that when weighing all the current facts and circumstances and application of interpretive
guidance of IFRIC 23, it has become probable that Sorfert will be required to settle the remainder of the
disputed tax amount. As a result, the Company recorded the full impact of the reinvestment case as an
income tax expense amounting to USD 65.8 million, which results in a remaining uncertain tax position
of USD 32.8 million, included in income tax payables.
Supported by its external advisors, Sorfert management will pursue the next instance of appeal as it
continues to have the view that the grounds of the claim will be ruled as unfounded, as Sorfert has
satisfied the intent and purpose of the reinvestment obligations under the ANDI regime.
13. Inventories
$ millions
2021 2020
Finished goods
185.2
149.0Raw materials and consumables
21.3
30.4Spare parts, fuels and others
137.0
114.4Total
343.5
293.8During 2021, the total write-downs amount to USD 31.9 million (2020: USD 1.4 million) of which USD
31.1 million (2020: USD 1.0 million) relates to spare parts. During 2021 there were no reversals of write
downs (2020: USD 5.2 million). Inventory amounting to USD 36.7 million (2020: USD 31.2 million) has
been pledged as security for external loans of IFCo. Reference is made to note 18.
14. Cash and cash equivalents
$ millions
2021 2020
Cash on hand
0.2
0.2Bank balances
1,439.3
632.0Restricted cash
140.8
54.1Total
1,580.3
686.3Restricted cash
Restricted cash of USD 128.4 million (2020: USD 47.4 million) is held as part of IFCo’s debt service
requirements for the outstanding bonds, of which USD 43.4 million (2020: USD 39.4 million) is held as a
required deposit in a major maintenance reserve account and is to be used to fund capital expenditure,
and USD 80.0 million (2020: nil) is held as required deposit in a project operating reserve account which
is to be used to fund operating expenses in three month increments.
The remaining restricted balances are held as collateral against letters of credit and letters of guarantees
issued.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
158Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
15. Equity attributable to owners of the Company
The movements in the number of shares can be summarized as follows:
2021 2020
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
210,306,101Par 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 2021:
• The IPO of Fertiglobe resulted in an increase in retained earnings of USD 332.7 million and an
increase in non-controlling interests of USD 141.0 million. Reference is made to note 17.
• The acquisition of additional shares in EBIC resulted in an increase in retained earnings of USD 6.0
million and a decrease in non-controlling interests of USD 44.4 million. Reference is made to note 17.
•
•
An amount of USD 8.5 million related to share-based compensation expense was recognized in
retained earnings.
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.
16. Reserves
$ millions
Hedge
reserve
Financial
assets at fair value
through other
comprehensive
income
Currency
translation
Treasury
shares Total
At 1 January 2020 (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)
Increase in hedge reserve
(16.9) - - - (16.9)
Currency translation differences
- - (21.7) - (21.7)
Financial assets at fair value through
other comprehensive income
- (10.8) - - (10.8)
Other comprehensive income
(16.9) (10.8) (21.7) - (49.4)
Treasury shares sold / delivered
- - - 4.8 4.8
Treasury shares acquired
- - - (1.0) (1.0)
At 31 December 2021
(11.2) (17.8) (344.1) (10.9) (384.0)
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
159Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
16. Reserves
(continued)
Treasury shares
During the financial year ended 31 December 2021 the company acquired 40,583
shares and sold and
delivered out of share-based payment plans 195,512 shares.
2021 2020
Number of shares
406,997
561,926Average carrying value per share (USD)
23.43
25.13Total (in millions USD)
9.5
14.1Foreign exchange effect
1.4
0.6Total carrying value of treasury shares
(in millions of USD)
10.9
14.717. Non-controlling interests
The non-controlling interests in the respective entities can be summarized as follows:
2021
$ millions Fertil* EFC*
Egyptian
Basic
Industries
Corporation*
Sorfert
Algeria
Spa* Other Total
Non-controlling
interests
50.00% 50.06% 62.50% 74.51% - -
Non-current assets
843.8 820.0 176.2 516.7 19.9 2,376.6
Current assets
213.9 75.1 122.5 451.4 2,124.0 2,986.9
Non-current liabilities
(159.9) (128.4) (4.4) (193.7) (981.0) (1,467.4)
Current liabilities
(112.8) (97.2) (40.9) (60.0) (2,076.0) (2,386.9)
Net assets
785.0 669.5 253.4 714.4 (913.1) 1,509.2
Revenues
466.3 307.3 195.9 614.6 1,916.0 3,500.1
Profit
151.6 83.9 84.4 280.4 (12.0) 588.3
Other comprehensive
income
- - - (33.0) 0.7 (32.3)
Total comprehensive
income
151.6 83.9 84.4 247.4 (11.3) 556.0
Dividend cash flows
- - (3.9) (189.5) (606.3) (799.7)
* Non-controlling interests in all Fertiglobe entities increased due to the sale of shares by OCI as part of
the Fertiglobe IPO. OCI has sold 8% of the total shares in Fertiglobe plc.
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)
Movements in equity attributable to non-controlling interests:
• The Fertiglobe IPO resulted in an increase in non-controlling interests of USD 141.0 million.
• The acquisition of additional shares in EBIC resulted in a decrease in non-controlling interests of USD
44.4 million.
• T
otal dividends declared to non-controlling interests amounted to USD 788.1 million (2020: USD 49.2
million).
•
I
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, which is recognized in cost of sales. As a result of this agreement the non-
controlling interests increased by USD 104.6 million (2020: USD 17.4 million) during 2021. The effect
of the profit sharing agreement represents the gross amount allocated to the partner. This amount is
subsequently diluted by other non-controlling interests in Fertiglobe.
• 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
160Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
17. Non-controlling interests
(continued)
Acquisition of additional shares in EBIC
In August 2021, Fertiglobe acquired an additional 25% stake in OCI MEPCO Cayman Limited from
KBR. As a result of this transaction OCI's share in Egypt Basic Industries Corporation (EBIC) increased
from 34.8% to 43.5% (prior to the Fertiglobe IPO). The consideration of USD 43.0 million includes
a transfer of KBR's receivable related to unpaid dividends of USD 4.6 million, resulting in a net
consideration of USD 38.4 million. The following table summarises the effect of the transaction on the
Company's equity attributable to shareholders:
$ millions
Carrying amount of non-controlling interests acquired
44.4
Consideration paid to non-controlling interests in cash
(38.4)
Effect on equity attributable to owners of the Company
6.0
Fertiglobe IPO
On 27 October 2021, Fertiglobe listed on the Abu Dhabi Securities Exchange ("ADX") under the ticker
“FERTIGLB” and the International Securities Identification Numbering (Isin) code “AEF000901015”.
OCI sold 8% of the total shares in Fertiglobe, in total 13.8% of the Fertiglobe’s share capital was
listed. Following the IPO, OCI’s shareholding percentage in Fertiglobe is 50% plus one share (and OCI
will retain control over Fertiglobe). OCI’s proceeds from the sale of its shares amount to USD 461.1
million and fees related to Fertiglobe IPO amount to USD 14.1 million, resulting in net proceeds of USD
447.0 million. The following table summarises the effect of the transaction on the Company's equity
attributable to shareholders:
$ millions
Proceeds from sale of shares
461.1
Fees related to the sale of shares
(14.1)
Net proceeds from the sale of shares
447.0
Indemnities
26.7
Effect on total equity
473.7
Non-controlling interests
141.0
Effect on equity attributable to owners of the Company
332.7
As part of the equity offering indemnifications were agreed between shareholders. This resulted in a
change of the indemnifications previously recorded as part of the Fertiglobe PPA. Reference is made to
note 21.
Fertiglobe 2019 business combination with ADNOC
As part of the business combination in 2019, OCI N.V. acquired 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. retained 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 was 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 was 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.
As a result of the Fertiglobe IPO, NCI increased in all Fertiglobe entities, reference is made to above.
18. Loans and borrowings
$ millions
2021 2020
At 1 January
4,416.6
4,662.3Proceeds from loans
2,248.3
2,070.4Proceeds from bank overdraft facility
398.4
-Repayment and redemption of loans and borrowings
(3,186.1)
(2,396.0)Newly incurred transaction costs
(10.0)
(14.6)Amortization of transaction costs / (bond) premiums
39.3
34.1Effect of movement in exchange rates
(105.7)
60.4At 31 December
3,800.8
4,416.6Non-current
3,290.2
4,226.9Current
510.6
189.7Total
3,800.8
4,416.6The 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 YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
161Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
18. 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
294.0 228.6 65.4 N/a
Debt service reserve account, ban for any disposal or
decrease of the Company share and assets
Iowa Fertilizer Company
(‘IFCo’)
Secured
USD 429.0
USD 425.4
Fixed: 5.25%
Fixed 5.25%
December 2025
December 2050
427.0
413.0
427.0
413.0
-
-
559.0
423.5
Certain bank accounts, property of IFCo, inventories,
all funds, including equity contributions of
USD 1,555.4 million by OCI
Fertiglobe Holding Ltd. Secured USD 1,100.0 LIBOR + 1.05% April 2024
1,091.8 1,097.6 (5.8) 1,100.0
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 300.0 LIBOR + 1.75% October 2026
- - - -
N/aOCI N.V. (‘OCI’)
Senior
Secured
Notes
USD 324.0
EUR 360.0
(USD 409.3)
Fixed: 4.625%
Fixed: 3.625%
October 2025
October 2025
321.3
405.7
321.3
405.7
-
-
336.6
423.4
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 + 1.50% April 2023
397.0 397.0 - 397.0
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 N.V. ('OCI')
Bank
overdraft
N/a N/a
No defined
maturity
383.0 - 383.0 N/a
N/a
OCI Nitrogen
Inventory
financing
USD 70.2
(EUR 57.4)
1.25%
No defined
maturity, facility
is uncommitted
with monthly roll
overs
68.0 - 68.0 68.0
Stand by letter of credit of EUR 6.0 million (USD 6.8 million)
and OCI N.V. guarantee of EUR 60 million (USD 68.2 million)
Total 31 December 2021
3,800.8 3,290.2 510.6 N/a
1
As at 31 December 2021 the carrying amount of loans and borrowings exclude interest of USD 10.9 million (2020: USD 24.4 million).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
162Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
18. 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/a
OCI 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 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 YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
163Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
18. 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 2021 all financial covenants were met.
In the event the respective borrowing companies would not comply with the covenant requirements,
in total an amount of USD 2,648.6 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 2021
Fertiglobe
In August 2021, Fertiglobe completed a USD 1,100.0 million refinancing by means of a bridge loan
of USD 900.0 million with an accordion option of USD 200.0 million at an interest rate of US LIBOR +
1.05% in the first year, after which it increases with 0.025% every three months. This facility replaced the
remaining EFC facility of USD 150.0 million and the USD 160.0 million loan at Fertiglobe Holding. The
bridge loan matures in February 2023, with 2 x 6-month extensions at the company’s option. Fertiglobe
also completed a USD 300.0 million revolving credit facility maturing in August 2026 carrying an interest
rate of Libor +1.75%, which replaced the USD 75 million revolving credit facility at Fertiglobe Holdings.
Both facilities are guaranteed by certain of Fertiglobe Holdings subsidiaries.
Proceeds from borrowings
Proceeds from borrowings in 2021 totaled an amount of USD 2,248.3 million, which consisted of the
net proceeds of the new financing arrangements of Fertiglobe Holding, new proceeds from the revolving
credit facility at OCI N.V. and changes in OCI Nitrogen's Inventory Financing.
Redemptions
Redemptions of borrowings in 2021 totaled an amount of USD 3,186.1
million, which consisted of the
partial or total repayment of bonds at OCI N.V., repayment of borrowings at EFC, repayment of some
IFCo bonds and regular installments for borrowings and changes in the outstanding amounts of the
revolving credit facilities at OCI Nitrogen, Sorfert and Fertiglobe Holding.
Undrawn bank facilities
As of 31 December 2021, the Group had not drawn external bank facilities in the amount of USD 800.0
million. This relates to a working capital facility of IFCo of USD 50.0 million and external bank facilities of
Fertiglobe Holding Ltd of USD 300.0 million and OCI N.V. of USD 450.0 million.
Bank overdraft
As of 31 December 2021, the bank overdraft facility of OCI N.V. totaled an amount of USD 383.0 million.
OCI N.V. has drawn a net amount of USD 256.5 million under its Header Cash Pool Facility. Reference is
made to note 6.4.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
164Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
19. 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.
$ millions
Non-current
lease obligations
Current
lease obligations Total
At 1 January 2020 244.3 41.0 285.3
Movements 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
Movements in the carrying amount:
Payments
- (47.3) (47.3)
Accretion of interest
8.1 0.4 8.5
Additions
30.5 2.3 32.8
Disposals
(4.8) - (4.8)
Transfers
(40.6) 40.6 -
Modifications
3.3 1.0 4.3
Effect of movement in exchange rates
(7.6) (0.9) (8.5)
At 31 December 2021
237.5 39.7 277.2
20. Trade and other payables
$ millions Note
2021 2020
Trade payables
425.3
298.6Trade payables due to related parties (30)
87.9
81.4Amounts payable under the securitization agreement
149.7
113.6Accrued dividend to non-controlling interests
4.1
12.2Other payables
66.9
52.0EUA liabilities (6.3)
116.2
99.0Employee benefit liabilities
14.5
12.9Accrued expenses
264.9
235.8Accrued interest
10.9
24.4Customer advance payment / deferred revenue
222.7
77.7Other tax payable
5.3
13.0Commodity derivative financial instruments
12.8
8.7Total
1,381.2
1,029.3Non-current
23.7
25.7Current
1,357.5
1,003.6Total
1,381.2
1,029.3Information 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 12.8 million as per 31 December 2021
(2020: USD 8.7 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 YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
165Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
21. Provisions
$ millions
Claims and
other provisions,
onerous contracts
Donation
provision Total
At 1 January 2021
40.4 120.9 161.3
Recorded during the year
36.3 - 36.3
Used during the year
(64.0) - (64.0)
Reversed
(1.2) - (1.2)
Reclassification
26.7 - 26.7
Effect of movement in exchange rates
(1.8) 0.2 (1.6)
At 31 December 2021
36.4 121.1 157.5
Non-current
12.8 - 12.8
Current
23.6 121.1 144.7
Total
36.4 121.1 157.5
Provision for indemnifications
As a consequence of the Fertiglobe IPO, all other shareholders of Fertiglobe plc will be indemnified
for the outcome of certain legacy legal exposures. An indemnification asset of USD 26.7 million is
reclassified to other receivables as the offsetting criteria are no longer met. Reference is made to
note 17.
Claims and other provisions
The Group is involved in various litigations, arbitrations and commercial disputes. In cases where it is
probable that the outcome of the legal proceedings and commercial disputes 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 at the 2014 exchange rate) 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 of EGP 1,904 million (approximately USD 266.2 million at the 2015 exchange rate) from the
Egyptian Authorities. At year end 2021 the carrying amount in US dollars had reduced to USD 121.1
million, due to the devaluation of the EGP since March 2015.
Onerous contracts
Due to the significant increase in the (TTF) gas prices, the production costs for natural gas based
products increased significantly in Europe. The higher production costs resulted in the identification of
several onerous contracts, as the unavoidable costs of meeting these contract commitments exceeded
the economic benefits that are expected to be received under them. Therefore, an onerous contract
provision amounting to USD 5.5 million was recognized for these contracts. As the contracts mainly
relate to sales commitments for Q1 2022, the provision is classified as current.
22. Development of cost of sales and selling, general and administrative expenses
a. Expenses by nature
$ millions Note
2021 2020
Raw materials and consumables and finished goods
3,203.5
2,105.7Maintenance and repair
150.2
128.4Employee benefit expenses (22b)
408.9
364.5Depreciation, amortization and impairment (7)
891.6
592.2Consultancy expenses
34.0
33.1Other
67.9
57.4Total
4,756.1
3,281.3Cost of sales
4,489.7
3,062.0Selling, general and administrative expenses
266.4
219.3Total
4,756.1
3,281.3The extreme cold weather and spike in gas prices in the US in February resulted in temporary downtime
at IFCo. Due to this downtime IFCo sold back its forward purchased gas to its supplier, which resulted
in a gain from the resale of gas of USD 61 million. This figure does not include and is partly offset by
the lost margin due to the lower production volumes and additional expenses associated with the
downtime. The gain on the resale of gas is recorded as part of raw materials and consumables and
finished goods.
b. Employee benefit expenses
$ millions Note
2021 2020
Wages and salaries
263.0
244.7Social securities
8.2
7.8Employee incentive plans
51.2
34.1Pension cost
24.3
22.1Share-based compensation expenses (22c)
8.5
7.9Other employee expenses
53.7
47.9Total
408.9
364.5NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
166Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
22. Development of cost of sales and selling, general and administrative expenses
(continued)
During the financial year ended 31 December 2021, the number of key executives was 4 (2020: 4 key
executives), which represents the Executive Board members; Nassef Sawiris (Executive Chair), Hassan
Badrawi (Chief Financial Officer) Maud de Vries (Chief Legal and Human Capital Officer) and Ahmed El-
Hoshy (Chief Executive Officer). During the financial year ended 31 December 2021, the number of staff
employed in the Group amounted to 3,853 employees (2020: 3,682 employees).
c. Share-based compensation arrangements
OCI has currently award agreements outstanding under three different share-based compensation
plans. In 2021 share based compensation Awards were granted under the existing Performance Share
Unit Plan for Executive Directors, the Restricted Stock Unit Plan and the new Employee Performance
Share Unit Plan.
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.
Performance Share Plan
2018 Grant 2017 Grant
Conditional shares granted 166,564 190,600
Fair value at grant date (EUR) 3,459,534 3,375,526
Fair value at grant date (EUR per share) 20.77 17.71
Vesting period at issuance (years) 3 3
Risk free interest rate (0.589)% (0.7)%
Expected share price volatility 37.5% 39.3%
Dividend yield 0.0% 0.0%
Vested in 2017 - 87,013
Vested in 2020
-
103,587Outstanding at 31 December 2020 166,564 -
Expired in 2021
(166,564) -
Outstanding at 31 December 2021
- -
The vesting of the 2018 shares was conditional on OCI’s TSR performance in the three-year
performance period ending 7 February 2021 and continued employment. Over the 3-year performance
period OCI’s TSR performance ranked 10th in the TSR peer group at the 25th percentile. As a result,
the award vested at 0% of target and no shares were delivered.
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.
Bonus Matching Plan
2018 Grant 2017 Grant
Conditional shares granted 93,451 95,060
Fair value at grant date (EUR) 1,690,529 1,577,045
Fair value at grant date (EUR per share) 18.09 16.59
Vesting period at issuance (years) 3 3
Dividend yield 0.0% 0.0%
Vested in 2017
-
14,496Vested in 2020
-
80,564Outstanding at 31 December 2020 93,451 -
Vested in 2021
93,451
-Outstanding at 31 December 2021
-
-In 2019 it was decided to discontinue the Bonus Matching Plan for all eligible employees. At 31
December 2021 there were no Bonus Matching Rights outstanding.
Executive Director 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. Up to 2021, Total Shareholder
Return (‘TSR’) was the only performance measure. In 2021 the Plan was amended and new
performance measures were added. For each Award, starting with the 2021 Award made on 8 February
2021 vesting will be dependent on relative TSR (60% weight) and additional performance measures
(40% weight), selected from two sets of strategic initiatives (operational excellence and ESG). The
relative TSR performance is measured 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
167Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
22. Development of cost of sales and selling, general and administrative expenses
(continued)
The relative TSR ranking that OCI achieves in the peer group and the achievements on the other
performance measures 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.
Performance Share Units Plan
2021 Grant 2020 Grant 2019 Grant
Conditional shares granted 230,558
230,612
316,729Fair value at grant date (EUR) 4,486,659
4,065,690
4,336,020Weighted average fair value at grant date (EUR per share) 19.46
17.63
13.69Vesting period at issuance (years) 3
3
3Risk free interest rate (0.659)%
(0.728)%
(0.660)%Expected share price volatility 34.7%
44.2%
34.5%Dividend yield 0.0%
0.0%
0.0%Outstanding at 31 December 2020 230,558
-
316,729Vested in 2021
- - -
Outstanding at 31 December 2021
230,612 316,729 230,558
Restricted Stock Units Plan
For the level below the Board, a restricted stock unit plan was implemented to replace the Bonus
Matching Plan. First award 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 one third of the restricted stock units comprising
the award at the second anniversary of the date of grant and for two thirds 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 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.
Restricted Stock Units Plan
2021 Grant 2020 Grant 2019 Grant
Conditional shares granted 206,253
132,666
89,900Fair value at grant date (EUR) 5,455,392
2,409,215
945,748Fair value at grant date (EUR per share) 26.45
18.16
10.52Vesting period at issuance (years) 3
3
3Dividend yield 0.0%
0.0%
0.0%Outstanding at 31 December 2020 206,253
-
89,900Forfeited in 2021
1,958 - -
Vested in 2021
5,551 10,873 85,638
Outstanding at 31 December 2021
125,157 79,027 120,615
Employee Performance Share Units Plan
In 2021, the Employee Performance Share Unit Plan was introduced for key Employees. The employee
performance share unit plan is similar to the executive director performance share unit plan. For
the 2021 Award made on 8 February 2021 vesting will be dependent on relative TSR (60% weight)
and additional performance measures (40% weight), selected from two sets of strategic initiatives
(operational excellence and ESG). The relative TSR performance is measured 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 TSR ranking that OCI achieves in the peer group and the achievements on the other
performance measures 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 employees for a period of 2 years.
Employee Performance Share Units Plan
2021 Grant
Conditional shares granted
14,006
Fair value at grant date (EUR)
246,926
Weighted average fair value at grant date (EUR per share)
17.63
Vesting period at issuance (years)
3
Risk free interest rate
(0.728)%
Expected share price volatility
44.2%
Dividend yield
0.0%
Outstanding at 31 December 2020 -
Vested in 2021
-
Outstanding at 31 December 2021
14,006
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
168Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
23. Other income
$ millions
2021 2020
Insurance proceeds
-
3.7Fertiglobe business combination
-
13.3Other
1.4
0.6Total
1.4
17.6Insurance 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
2021 2020
Other (21)
1.2
23.4Total
1.2
23.4The other expenses in 2020 are related to a settlement agreement related to a historical indemnification
provided.
25. Net finance cost
$ millions
2021 2020
Interest income on loans and receivables
4.0
4.4Derivatives gain
0.3
-Foreign exchange gain
30.3
208.1Finance income
34.6
212.5Interest expense and other financing costs on financial liabilities measured
at amortized cost
(281.0)
(307.5)Foreign exchange loss
(27.8)
(104.9)Finance cost
(308.8)
(412.4)Net finance cost recognized in profit or loss
(274.2)
(199.9)Included in the interest expense and other financing costs on financial liabilities measured at amortized
cost are debt modification costs of USD 61.7 million (2020: USD 51.3 million). This consists of a
call premium of USD 37.4 million (2020: USD 33.3 million) related to early redemption of bonds and
accelerated amortization of USD 24.3 million (2020: USD 18.0 million).
For the interest expense related to lease obligations, reference is made to note 19.
The foreign exchange gains and losses mainly relate to external financing, FX derivatives and to the
revaluation of intercompany balances in foreign currencies. Compared to 2020, the foreign exchange
gains and losses are significantly lower due to the application of net investment hedging and the
designation of certain intercompany loans as part of the net investment in foreign operations. As a
result of the net investment hedge, an amount of USD 72.9 million of foreign exchange gains and USD
137.4 million of foreign exchange losses were recognized in other comprehensive income instead of
net finance cost. The foreign exchange losses recognized in other comprehensive income includes the
settlement of FX derivatives of USD 72.8 million.
26. Earnings per share
2021 2020
i. Basic
Net profit / (loss) attributable to shareholders
570.5
(177.7)Weighted average number of ordinary share (basic)
209,852,247
209,709,296Basic earnings per ordinary share
2.719
(0.847)ii. Diluted
Net profit / (loss) attributable to holders of ordinary shareholders
570.5
(177.7)Weighted average number of ordinary shares (diluted)
211,032,092
209,709,296Diluted earnings per ordinary share
2.703
(0.847)Weighted average number of ordinary shares calculation
Shares
2021 2020
Issued ordinary shares at 1 January
210,306,101
210,306,101Effect of treasury shares held
(453,854)
(596,805)Weighted average number of ordinary shares outstanding as per
31 December
209,852,247
209,709,296
Adjustment for assumed equity-settled share-based compensation
1,179,845
-
Weighted average number of ordinary shares outstanding (diluted)
as per 31 December
211,032,092
209,709,296
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
169Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
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 realignment
Beginning on 1 October 2021, the Company has realigned its segments for its Fertiglobe and Methanol
US segments. The primary driver for the realignment is a change in how the business operations
are reported to the CODM. As a result of this realignment, the Company changed its organizational
structure and the composition of its operating segments, which resulted in a change in reportable
segments. The Fertiglobe segment now includes the holding entity Fertiglobe Holding plc, which is the
ultimate parent of the Fertiglobe Group and became an ADX registrant following the IPO of Fertiglobe on
27 October 2021.
Methanol US now includes OCI USA Inc., an entity that serves as the US corporate income taxpayer
for OCI Beaumont and OMM LLC. In anticipation of the sale of a 15% stake in the OCI Methanol Group
(reference is made to note 32), all non-methanol related activities were internally restructured to other
entities.
Nitrogen US now includes Iowa Intermediate Fertilizer Holding, an entity that serves as the US corporate
income taxpayer for Iowa Fertilizer Company. Accordingly, the Company restated the previously
reported segment information for the year ended 31 December 2020.
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, the trading entity OCI Methanol
Marketing LLC (OMM US) and OCI USA Inc.
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. OCI USA Inc. is the US
corporate taxpayer for OCIB and OMM US.
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
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), Fertiglobe Holding plc 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
170Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
27. Segment reporting
(continued)
2021
$ millions
Methanol
US
1
Methanol
Europe
Nitrogen
US
Nitrogen
Europe Fertiglobe Other Eliminations Total
Total revenues
789.2 531.3 827.7 1,256.8 3,310.7 - (397.0) 6,318.7
EBITDA
2
393.0 148.5 344.3 209.3 1,571.7 (75.1) (137.3) 2,454.4
Adjusted EBITDA
2
370.8 151.4 344.3 207.6 1,550.5 (67.5) (30.6) 2,526.5
Income from equity-
accounted investees
- - - 7.5 - - (0.2) 7.3
Depreciation,
amortization and
impairment
(151.0) (303.7) (152.4) (92.1) (267.1) (4.0) 78.7 (891.6)
Finance income
58.0 1.1 0.4 6.9 19.6 76.9 (128.3) 34.6
Finance expense
(89.7) (3.1) (130.8) (9.6) (52.7) (179.3) 156.4 (308.8)
Income tax
(expense) / income
(38.6) 2.6 197.9 (29.0) (295.1) 25.1 - (137.1)
Net profit / (loss)
171.7 (154.6) 259.4 93.0 976.4 (156.4) (30.7) 1,158.8
Equity-accounted
investees
- - - 42.0 - 0.2 452.7 494.9
Capital expenditures
PP&E
89.7 21.7 44.7 62.9 84.6 4.5 (72.9) 235.2
Total assets
1,882.2 87.8 2,417.9 801.8 4,921.1 318.2 (617.4) 9,811.6
2020
$ millions
Methanol
US
1
3
Methanol
Europe
Nitrogen
US
3
Nitrogen
Europe Fertiglobe
3
Other
3
Eliminations
3
Total
Total revenues 466.3 339.1 547.9 752.9 1,550.8 - (182.9) 3,474.1
EBITDA
2
142.7 23.0 181.0 125.1 449.9 (61.1) (81.4) 779.2
Adjusted EBITDA
2
130.1 21.6 181.0 132.3 453.4 (46.4) (2.2) 869.8
Income from equity-
accounted investees
- - - 2.3 - - (39.0) (36.7)
Depreciation and
amortization
(154.4) (28.5) (142.7) (82.9) (268.1) (2.4) 86.8 (592.2)
Finance income 62.0 0.1 0.3 7.2 33.5 237.6 (128.2) 212.5
Finance expense (97.4) (4.4) (125.6) (9.9) (46.9) (287.7) 159.5 (412.4)
Income tax
(expense) / income
6.2 0.8 (0.1) (13.4) (40.9) 2.9 - (44.5)
Net profit / (loss) (40.9) (9.0) (87.1) 28.4 127.5 (110.7) (2.3) (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 66.5 0.6 (10.7) 252.8
Total assets 1,613.0 436.6 2,192.4 743.9
4,642.9 68.1 (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 209-210 of this report.
3
The comparative numbers of 2020 are restated to reflect the realignment of the Fertiglobe, Methanol
US, Nitrogen US and Other segments.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
171Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
27. Segment reporting
(continued)
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
2021 2020 2021 2020
Europe
2,268.6
1,218.8563.1
878.3Americas
2,371.8
1,281.22,963.1
2,916.1Africa & Middle East
362.5
302.03,492.3
3,697.2Asia & Oceania
1,315.8
672.114.3
21.6Total
6,318.7
3,474.17,032.8
7,513.2The 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 committed guarantee facility with Rabobank for a maximum guarantee amount of EUR 200.0
million (USD 227.4 million). Under this guarantee facility, EUR 7.4 million (USD 8.4 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 EUR 100.0 million (USD 113.7 million). This facility is utilized for EUR
68.8 million (USD 78.2 million). The facility is used to issue a performance guarantee on behalf of OCI
Nitrogen B.V. OCI also has an uncommitted facility for the issuance of payment undertakings with BNP
Paribas for an amount of USD 89.4 million, fully utilized. Outstanding letters of credit as at 31 December
2021 (uncovered portion) amounted to nil.
Litigations and claims
In the normal course of business, the Group entities and joint ventures are involved in some arbitration,
commercial disputes or court cases as defendants or claimants. These litigations and commercial
disputes are carefully monitored by the entities’ and Group 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 39.9 million) and an officer of the company
received a fine of DZD 2.8 billion (about USD 20.0 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.
OCI S.A.E. tax dispute
In October 2012, the Egyptian Tax Authority (‘ETA’) raised a tax evasion claim against our Egyptian
subsidiary, 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
172Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
28. Contingencies
(continued)
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 146.3 million. There have been no developments
in the tax dispute during 2021.
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.
29. Commitments
29.1 Biogas purchase agreements
OCI Fuels B.V. 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
2021, an expected 16.6 million mmbtu biogas will be purchased over the coming years (2022 - 2028).
The total expected purchase commitment per 31 December 2021 amounts to USD 154.1 million (2020:
USD 158.2 million). Total contract volume is 41.8 million mmbtu and the total contract value is USD
371.3 million (2020: USD 260.1 million).
29.2 Capital commitments
Capital commitments relate to purchase commitments of property, plant and equipment.
$ millions
2021 2020
OCI Beaumont
0.1
-Sorfert
19.1
19.9Fertil
19.8
8.5BioMCN
5.5
7.6OCI Nitrogen
9.8
7.9OCI Fuels USA
0.9
-EBIC
4.6
-EFC
3.7
1.3IFCo
2.4
4.6Total
65.9
49.8NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
173Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
30. 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 the following types of related party
transactions:
• Those with NNS Luxembourg Sarl for occasional consultancy services and Residencia Europe Ltd for
personnel recharges.
• The Executive Chair’s travel as per his right to expense the use of a private aircraft for OCI-related
business travel.
• 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.
The following is an overview of the transactions and outstanding amounts as at 31 December 2021:
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 0.9 - -
OCI Construction Holding
Cyprus
OC group
company
- - - 0.8 - -
NNS Luxembourg Sarl Related via
shareholder
- - 0.2 - - -
Residencia Europe Ltd. Related via
shareholder
0.6 0.2 - - - -
Nassef Sawiris Executive
Chair
- - 0.7 0.4 - -
Total
0.6 0.2 1.2 2.1 - -
The following is an overview of the 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 - -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
174Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
30. Related party transactions
(continued)
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.
The following is an overview of the transactions and outstanding amounts as at 31 December 2021:
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
8.6 - 179.4 32.4 - -
Sitech Manufacturing
Services C.V.
Associate
- - 124.5 36.0 - -
Utility Support Group B.V. Related via
an associate
31.5 3.7 114.8 14.5 - 1.0
Sitech Services B.V. Associate
- 0.1 18.1 2.4 - -
Nitrogen Iberian Company SL Joint venture
24.3 - - 0.5 - -
Shanxi Fenghe
Melamine Co Ltd.
Joint venture
0.1 1.0 31.8 - - -
Total
64.5 4.8 468.6 85.8 - 1.0
The following is an overview of the 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 - -
Nitrogen Iberian Company SL 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
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 as per 31 December 2020 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. This Credit Facility has been settled in July
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. This loan has been settled in July 2021.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
175Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
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 2021, the total remuneration costs relating to the
Executive Directors amounted to USD 13.1 million (2020: USD 11.9 million) consisting of the elements
listed in the table below:
2021
Age Base salary
1
Annual bonus
Share-based
compensation
Total
remuneration
1
N. Sawiris
60 1,000,000 - 2,086,600 3,086,600
H. Badrawi
45 1,150,000 1,262,010 1,385,030 3,797,040
M. de Vries
49 560,000 614,544 509,197 1,683,741
A. El-Hoshy
37 1,307,692
2
1,714,688 1,533,043 4,555,423
Total
4,017,692 3,591,242 5,513,870 13,122,804
1
These figures exclude employer’s social security payments (USD 1.0 million).
2
This figure includes base salary for the additional position as Chief Executive Officer Fertiglobe since
27 October 2021.
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
These figures exclude employer’s social security payments (USD 0.6 million).
At 31 December 2021, the Executive Directors held
777,899
conditional performance shares
(2020: 713,851 including the conditional performance shares granted to A. El-Hoshy prior to his
appointment to the Board).
Outstanding
year end
2020
Granted
conditional Vested Expired
Outstanding
year end
2021 Vesting date
N. Sawiris 84,873
- - (84,873) - 25-02-2021
1
116,002
- - - 116,002 07-02-2022
135,354
- - - 135,354 07-02-2023
-
58,235 - - 58,235 07-02-2024
N. Sawiris total 336,229
58,235 - (84,873) 309,591
H. Badrawi 40,315
- - (40,315) - 25-02-2021
1
66,701
- - - 66,701 07-02-2022
77,829
- - - 77,829 07-02-2023
-
66,971 - - 66,971 07-02-2024
H. Badrawi total 184,845
66,971 - (40,315) 211,501
M. de Vries 32,485
- - - 32,485 07-02-2023
-
32,612 - - 32,612 07-02-2024
M. de Vries total 32,485
32,612 - - 65,097
A. El-Hoshy 41,376
2
- - (41,376) - 25-02-2021
1
47,855
2
- - - 47,855 07-02-2022
71,061
2
- - - 71,061 07-02-2023
-
72,794 - - 72,794 07-02-2024
A. El-Hoshy total 160,292
72,794 - (41,376) 191,710
Total 713,851
230,612 - (166,564) 777,899
1
The 2018 Performance Shares granted to N. Sawiris, H. Badrawi and A. El-Hoshy could not vest on
7 February 2021, as OCI was in a Closed Trading Period (share based transactions related to the
2018 Performance Share Plan were not allowed for Executive Directors during this period under the
Insider Trading / Market Abuse Regulations). Accordingly, the 2018 Performance Shares vested on
25 February 2021 (the first trading day after the Closed Trading Period). Over the 3-year performance
period OCI’s TSR performance ranked 10th in the TSR peer group at the 25th percentile. As a result,
the awards vested at 0%.
2
These conditional performance shares were granted prior to appointment to the Board.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
176Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
31. Remuneration of the Board of Directors (key management personnel)
(continued)
As at 31 December 2021, the Executive Directors held no bonus matching shares (2020: 38,196
including the bonus matching shares granted to A. El-Hoshy prior to his appointment to the Board).
Outstanding
year end 2020
Granted Vested
Outstanding
year end
2021 Vesting date
N. Sawiris 17,190
- (17,190) - 05-05-2021
1
N Sawiris total 17,190
- (17,190) -
H. Badrawi 1,398
- (1,398) - 05-05-2021
1
H. Badrawi total 1,398
- (1,398) -
M. de Vries 4,975
- (4,975) - 09-04-2021
M. de Vries total 4,975
- (4,975) -
A. El-Hoshy 14,633
- (14,633) - 09-04-2021
A. El-Hoshy total 14,633
- (14,633) -
Total 38,196
- (38,196) -
1
The Matching rights granted to N. Sawiris and H. Badrawi could not vest on 9 April 2021, as OCI
was in a Closed Trading Period (share based transactions related to the 2018 Bonus Matching Plan
were not allowed for Executive Directors during this period under the Insider Trading / Market Abuse
Regulations). Accordingly, the 2018 Matching Award vested on 5 May 2021 (the first trading day after
the Closed Trading Period.
For M. de Vries and A. El-Hoshy, whose 2018 Matching rights were granted prior to their appointment
to the Board, vesting was allowed on 9 April 2021, in accordance with the plan rules.
As at 31 December 2021, the Executive Directors held 47,212 RSU shares (2020: 61,081 including
RSU shares granted to A. El-Hoshy prior to his appointment to the Board).
Outstanding
year end
2020 Granted Vested
Outstanding
year end
2021 Vesting date
M. de Vries 4,754
- (4,754) - 05-05-2021
1
9,509
- - 9,509 17-04-2022
M. de Vries total 14,263
- (4,754) 9,509
A. El-Hoshy 9,115
- (9,115) - 05-05-2021
1
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 46,818
- (9,115) 37,703
Total 61,081
- (13,869) 47,212
1
The Restricted Stock Units granted to M. de Vries and A. El-Hoshy could not vest on 17 April 2021, as
this was a Saturday. On the subsequent Monday, 19 April 2021 OCI was in a Closed Trading Period
(share based transactions related to the 2019 RSU Plan Matching Plan were not allowed during this
period under the Insider Trading / Market Abuse Regulations). Accordingly, the first tranche of the
2019 RSU Awards vested on 5 May 2021 (the first trading day after the Closed Trading Period).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
177Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
31. Remuneration of the Board of Directors (key management personnel)
(continued)
In 2021, the total remuneration costs relating to the Non-Executive Directors amounted to USD 1.7
million (2020: USD 1.7 million) consisting of the elements in the table below:
2021
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
S. Schat
150,000 20,000 - 20,000 - 190,000
A. Montijn-
Groenewoud
150,000 - - 7,500 15,833 173,333
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 - 73,859
1
- 7,500 231,359
D. Fraser
150,000 20,000 - - - 170,000
H. van de Kerkhof
150,000 - - - 7,500 157,500
Total
1,500,000 85,000 73,859 50,000 38,333 1,747,192
1
The amount reported as extraordinary item for D. Welch is the fee for services on the Board of
Fertiglobe Holding Ltd for the period 1 January 2021 - 26 October 2021.
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.
32. Subsequent events
OCI Methanol Group
On 7 February 2022 OCI N.V. announced the signing of the strategic alliance with two investors, ADQ
and Alpha Dhabi Holding will acquire a 15% share in OCI Methanol Group for a total consideration of
USD 375 million. Closing took place on 18 February 2021. This will be recorded as an equity transaction
in Q1 2022.
OCI proposed semi-annual dividend distribution
On 15 February 2022 OCI announced a proposed payment of an interim distribution for the period H2
2021 of EUR 1.45 per share (or c.USD 350 million including a USD 200 million base). OCI is convening
an extraordinary shareholders meeting (EGM) on 28 March 2022 to resolve on the distribution through
a repayment of capital with an option to shareholders to elect for a dividend distribution instead,
resulting in a distribution to shareholders scheduled for June, subject to a statutory two-month creditor
opposition period.
OCI Methanol Group dividend distribution
In February 2022, the OCI Methanol Group Board of Directors approved dividends of USD 420
million, which were paid out to OCI Methanol Group shareholders, OCI (USD 357 million) and minority
shareholders (USD 63 million), on 22 February 2022.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V.
Annual Report 2021
178Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
33. External auditors’ fee
The service fees recognized in the financial statements 2021 for the service of KPMG amounted to USD
5.8 million (2020: USD 4.7 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
2021 2020 2021 2020
Audit of group financial statements
4.6
3.82.6
2.2Other assurance services
1.1
0.80.3
0.7Total assurance services
5.7
4.62.9
2.9Tax services
0.1
0.1-
-Sundry services
-
--
-Total
5.8
4.7-
2.934. List of principal subsidiaries as per 31 December 2021
Companies Country
Percentage of
interest
Consolidation
method
Fertiglobe plc UAE 50.00 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 plc
Ruwais Fertilizers Industries Ltd (Fertil) UAE 100.00 Full
Egypt Basic Industries Corporation Egypt 75.00 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 YEAR ENDED 31 DECEMBER CONTINUED
Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
6.
Financial
statements
Parent Company
OCI N.V.
Annual Report 2021
179
OCI N.V.
Annual Report 2021
180Parent Company Financial Statements
Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
AS AT
$ millions Note
31 December
2021
31 December
2020
Assets
Non-current assets
Investment in subsidiaries (41)
8,480.7
7,207.0Property, plant and equipment
1.9
0.8Right-of-use assets
3.1
0.8Other receivables (42)
703.5
881.8Financial assets at fair value through other comprehensive income (43)
2.8
2.9Deferred tax assets (54)
5.5
-Total non-current assets
9,197.5
8,093.3
Current assets
Inventory (44)
21.9
-Other receivables (42)
220.4
128.6Cash and cash equivalents (45)
179.5
14.2Total current assets
421.8
142.8
Total assets
9,619.3
8,236.1
Equity
Share capital (46),(15)
5.6
5.6Share premium (15)
6,316.3
6,316.3Currency translation reserve
(1,705.8)
(1,242.2)
Fair value reserve
(1.4)
(1.5)
Other reserves
(113.2)
(117.0)
Retained earnings
2,773.4
269.6
Equity attributable to owners of the Company
7,274.9
5,230.8Liabilities
Non-current liabilities
Loans and borrowings (47)
1,124.1
2,660.7Lease obligations
2.6
0.2Deferred tax liabilities (54)
-
1.2Total non-current liabilities
1,126.7
2,662.1Current liabilities
Loans and borrowings (47)
995.3
277.2Lease obligations
0.6
0.6Trade and other payables (48)
221.8
65.4Total current liabilities
1,217.7
343.2
Total liabilities
2,344.4
3,005.3
Total equity and liabilities
9,619.3
8,236.1
The notes on pages 185 to 196 are an integral part of these parent company financial statements.
OCI N.V.
Annual Report 2021
181Parent Company Financial Statements
Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
PARENT COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER
$ millions Note
2021 2020
Revenue from dividend income (49)
1,322.2
176.9Other income
1
(51)
1,417.9
0.1General and administrative expenses (50)
(36.6)
(30.7)Other expenses (52)
(40.6)
(1,030.1)Operating profit / (loss)
2,662.9
(883.8)Finance income (53)
168.8
235.1Finance cost (53)
(363.5)
(284.7)Net finance (cost)
(53)
(194.7)
(49.6)Profit / (loss) before income tax
2,468.2
(933.4)Income tax (54)
31.9
3.3Net profit / (loss)
2,500.1
(930.1)Other comprehensive income:
Items that are or may be reclassified subsequently to profit or loss
Currency translation differences (46)
(463.6)
449.8Items that will not be reclassified to profit or loss
Changes in fair value of other financial assets
0.1
(0.8)Other comprehensive income, net of tax
(463.5)
449.0Total comprehensive income
2,036.6
(481.1)1
Other income in 2021 include a reversal of an impairment of investment in subsidiaries of USD 1,417.7 million (2020 impairment in other expenses: USD 1,008.6 million), reference is made to note 51.
The notes on pages 185 to 196 are an integral part of these parent company financial statements.
OCI N.V.
Annual Report 2021
182Parent Company Financial Statements
Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
$ millions Note
Share
capital
(15)
Share
premium
(15) Fair value reserve
Currency
translation
1
Other
reserves
Retained
earnings
Equity
attributable
to owners
of the
Company
Balance at 1 January 2020
5.6 6,316.3 (0.7) (1,692.0) (120.8) 1,195.5 5,703.9
Net profit / (loss) (46.2) - - - - - (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) -
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
Net profit / (loss) (46.2)
- - - - - 2,500.1 2,500.1
Other comprehensive income
- - 0.1 (463.6) - - (463.5)
Total comprehensive income
- - 0.1 (463.6) - 2,500.1 2,036.6
Treasury shares sold / delivered (16)
- - - - 4.8 (4.8) -
Treasury shares acquired (16)
- - - - (1.0) - (1.0)
Share-based payments (15)
- - - - - 8.5
8.5
Balance at 31 December 2021
5.6 6,316.3 (1.4) (1,705.8) (113.2) 2,773.4 7,274.9
1
Legal reserve under Dutch Law.
The notes on pages 185 to 196 are an integral part of these parent company financial statements.
OCI N.V.
Annual Report 2021
183Parent Company Financial Statements
Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
PARENT COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER
$ millions Note
2021 2020
Net profit / (loss)
2,500.1
(930.1)
Adjustments for:
Depreciation (50)
0.9
0.8Interest income (53)
(70.3)
(65.8)Interest expense (53)
160.9
198.4Net foreign exchange (gain) / loss (53)
104.1
(83.0)Revenue from dividend income (49)
(1,322.2)
(176.9)(Reversal of impairment) / impairment of subsidiaries (51)
(1,417.7)
1,008.6Share-based compensation (22b), (50)
8.5
7.9Income tax expense (54)
(31.9)
(3.3)Changes in:
Inventory (44)
(21.9)
-Other receivables (42)
(106.4)
(68.5)Trade and other payables (48)
4.7
(131.5)Cash flows:
Interest paid
(175.4)
(184.6)Interest paid Nile Holding loan
-
(7.1)Interest received
58.5
77.0Income taxes received
-
1.1Dividends received
1,322.2
176.9Cash flow (used in) / from operating activities
1,014.1
(180.1)Investments in intangible assets
(1.1)
-Capital contributions to subsidiaries (41)
(261.4)
-Cash flow (used in) investing activities
(262.5)
-The notes on pages 185 to 196 are an integral part of these parent company financial statements.
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information
PARENT COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER
$ millions Note
2021 2020
Purchase of treasury shares (16)
(1.0)
-Proceeds from borrowings (18), (47)
909.2
1,675.0Proceeds from borrowings from subsidiaries (47)
600.6
145.9Repayment of borrowings (47)
(2,401.2)
(1,756.1)Repayment of borrowings from subsidiaries (47)
(8.0)
-Newly incurred transaction costs (47)
(0.1)
(10.4)Settlement of FX derivatives (53)
(72.8)
45.6Payment of lease obligations
(0.7)
(0.6)Cash flow from financing activities
(974.0)
99.4Net increase / (decrease) in cash and cash equivalents
(222.4)
(80.7)Cash and cash equivalents at 1 January
14.2
92.3Effect of exchange rate fluctuations on cash held
4.7
2.6Cash and cash equivalents at 31 December
(203.5)
14.2Cash and cash equivalents in statement of financial position (45)
179.5
14.2Bank overdraft repayable on demand (47)
(383.0)
-Cash and cash equivalents in statement of cash flows
(203.5)
14.2The notes on pages 185 to 196 are an integral part of these parent company financial statements.
OCI N.V.
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185Parent Company Financial Statements
Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
NOTES 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
18 March 2022. 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 46 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 2021
186Parent Company Financial Statements
Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
NOTES 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
2021 2020
Other receivables (42)
923.9
1,010.4Financial assets at fair value through other comprehensive income (43)
2.8
2.9Cash and cash equivalents (45)
179.5
14.2Total
1,106.2
1,027.5The maximum exposure to credit risk for other receivables by geographic region was as follows:
$ millions
2021
2020Middle East and Africa
0.5
-Europe
112.1
43.3Americas
811.3
967.1Total
923.9
1,010.440.2 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 2021
$ 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 (47)
1,507.1 1,644.3 419.2 1,225.1 -
Loans and borrowings from
subsidiaries
1
(47)
612.3 612.3 612.3 - -
Trade and other payables (48)
221.8 221.8 221.8 - -
Total
2,341.2 2,478.4 1,253.3 1,225.1 -
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 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 (47) 2,660.7 3,140.1 106.6 3,033.5 -
Loans and borrowings from
subsidiaries
1
(47) 277.2 277.2 277.2 - -
Trade and other payables (48) 65.4 65.4 65.4 - -
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.
OCI N.V. leases office space and vehicles. The office space lease at Honthorststraat is renewed for a
period of 5 years, with an option to renew the lease thereafter. The office space at Willemsparkweg is
for an initial period of 5 years, with an option to renew the lease thereafter. Lease payments are indexed
annually.
Future minimum lease payments
$ millions
2021 2020
Less than one year
0.8
0.6Between one and five years
2.8
0.2More than five years
-
-Total
3.6
0.8
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187Parent Company Financial Statements
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40.2 Liquidity risk
(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 2021, if the US dollar had weakened / strengthened by 5 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
24.7
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
2021 2020
Other receivables
838.4
961.8Trade and other payables
(124.3)
(15.3)Loans and borrowings
(1,261.0)
(1,364.2)Cash and cash equivalents
53.0
3.9The 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.
2021
$ millions
Change in
FX rate
Effect on profit
before tax
Effect on
equity
EUR - USD
5 percent (24.7)
-(5) percent 24.7
-
2020
$ millions
Change in
FX rate
Effect on profit
before tax
Effect on
equity
EUR - USD 8 percent (33.1) -
(8) percent 33.1 -
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
2021 2020
Effect on profit before tax for the coming year +100 bps
(4.0)
(3.5)- 100 bps
4.0
3.5Commodity 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 CO
2
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 CO
2
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
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188Parent Company Financial Statements
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40.3 Market risk
(continued)
Categories of financial instruments
2021
$ 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)
881.1 42.8 -
Financial asset at fair value through other
comprehensive income (43)
- - 2.8
Cash and cash equivalents (45)
179.5 - -
Total
1,060.6 42.8 2.8
Liabilities
Loans and borrowings from third parties (47)
1,507.1 - -
Loans and borrowings from subsidiaries (47)
612.3 - -
Trade and other payables (48)
213.0 8.8 -
Total
2,332.4 8.8 -
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 (45) 14.2 - -
Total 1,014.4 10.2 2.9
Liabilities
Loans and borrowings from third parties (47) 2,660.7 - -
Loans and borrowings from subsidiaries (47) 277.2 - -
Trade and other payables (48) 54.5 10.9 -
Total 2,992.4 10.9 -
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
2021 2020
Balance at 1 January
7,207.0
7,600.7Reversal of impairment / (Impairment)
1,417.7
(1,008.6)Capital contribution
431.9
-Exchange rate differences
(575.9)
614.9Balance at 31 December
8,480.7
7,207.0Capital contributions
In 2021, capital contributions of USD 261.4 million in cash and USD 170.5 million in kind, by settling
loans and receivable balances, were made to OCI Intermediate B.V.
Impairment testing 2021
An impairment reversal trigger was identified in OCI N.V.'s investment in subsidiaries due to an increase
in share price as per December 2021 compared to 2020. As a result, the Group has prepared an
impairment test on the investment in subsidiaries in accordance with IAS 36. An impairment reversal is
recognized if the estimated recoverable amount of an asset exceeds its carrying 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 14 days trailing share price of OCI N.V. as per 31 December
2021 of USD 26.55 (which is measured with hierarchy level 1 of the fair value hierarchy category), the
number of outstanding shares of OCI N.V. (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 7,258.7
million.
The recoverable 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 carrying amount of the
investment. As a result, an impairment reversal of USD 1,417.7 million is recognized in the Parent
company statement of Profit or Loss and Other Comprehensive Income. The accumulated impairment
as per 31 December 2021 amounts to USD 154.5 million.
List of subsidiaries as per 31 December 2021:
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.
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189Parent Company Financial Statements
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42. Other receivables
$ millions
2021 2020
Receivables from subsidiaries
877.9
995.5Commodity derivatives
42.8
9.4Foreign currency derivatives
-
0.8Other receivables
3.2
4.7Total
923.9
1,010.4Non-current
703.5
881.8Current
220.4
128.6At 31 December
923.9
1,010.4The 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:
$ millions Type Interest rate
2021
Long-term
2021
Short-term
2020
Long-term
2020
Short-term
OCI USA Inc. Unsecured 8% fixed -
- -
392.1OCI USA Inc. Unsecured -
6.418% fixed
- -
489.7Iowa Intermediate
Fertilizer Holding
Corp Unsecured 5.2% fixed -
40.6 -
-Iowa Intermediate
Fertilizer Holding
Corp Unsecured 5.2% fixed -
662.9 -
-Iowa Intermediate
Fertilizer Holding
Corp Unsecured 5.1% fixed -
- 104.7
-Other receivables
subsidiaries - - 113.7
- 69.7
-Total 113.7
703.5 174.4
881.843. Financial assets at fair value through other comprehensive income
$ millions
2021 2020
Orascom Construction Limited (Dubai)
2.8
2.9Total
2.8
2.9Orascom Construction Limited is a related party.
44. Inventory
$ millions
2021 2020
European Emission Allowances
21.9
-Total
21.9
-During 2021, OCI N.V. purchased 261,247 European Emission Allowances from its subsidiary BioMCN
for an average price of EUR 73.56.
45. Cash and cash equivalents
$ millions
2021 2020
Bank balances
179.5
14.2Total
179.5
14.2The 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
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190Parent Company Financial Statements
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46. Equity attributable to owners of the Parent Company
46.1 Reconciliation of consolidated income and equity attributable to shareholders to
Parent Company income and equity attributable to owners
$ millions
2021
Equity
2021
Profit / (loss)
2020
Equity
2020
Profit / (loss)
Consolidated equity attributable to owners of
the company
1,999.0 521.1
1,131.7 (282.1)
Revaluation of subsidiaries (1,008.6)
5,329.7 1,417.7
3,912.0Difference gain on demerger 2015 -
(387.8)
(387.8)Difference in profit or loss 256.2
2,776.5 511.9
2,264.6Other comprehensive income 553.4
(1,543.6) (414.1)
(1,129.5)Business combination Fertiglobe -
(723.1) -
(723.1)Other direct equity movements (including impact
IFRS 9 adoption)
(175.8) -
162.9 -
Parent Company equity attributable to owners (481.1)
7,274.9 2,036.6
5,230.8The 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 5,329.7 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.
The Company recorded a reversal of impairment taken in previous year on subsidiaries of USD 1,417.7
million in 2021 (2020: USD 1,008.6 million).
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 2021 net result is USD 511.9 million higher in the parent company financial statements as the net
gain for 2021 is USD 2,500.1 million (mainly driven by partly reversal of the impairment taken in previous
year in subsidiaries of USD 1,417.7 million), whereas the net gain attributable to owners of the company
in the consolidated financial statements was USD 570.5 million.
The 2020 net result is USD 256.2 million higher 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.
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 2021 difference in income of USD 414.1 million comprises USD 505.8 million of currency translation
gains, USD 80.8 million of losses on cash flow hedges and USD 10.9 million losses on financial asset
at fair value through other comprehensive income, which do not occur in the parent company financial
statements.
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 assets
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 the Fertiglobe’s IPO bookbuilding
process.
46.2 Appropriation of net profit / (loss)
$ millions
2021 2020
Added to / (deducted from) retained earnings
2,500.1
(930.1)Net profit / (loss) attributable to shareholders
2,500.1
(930.1)Upon adoption of this proposed net profit / (loss) appropriation, the dividend for the 2021 financial year
will
be nil. Subsequent to the financial year end, the company announced a proposed payment of an
interim distribution for the period H2 2021of €1.45 per share. Refer to note 59 for further details of the
subsequent event.
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
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191Parent Company Financial Statements
Strategy and
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Corporate
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Business
performance
Risk management
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Financial
statements
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information
47. Loans and borrowings
$ millions
2021 2020
Senior notes
727.1
2,316.1Term loan and revolving credit facility
397.0
344.6Bank overdraft facility
383.0
-
Sub-total third-party
1,507.1
2,660.7OCI Chem 5 B.V.
-
0.4OCI Overseas Holding Ltd.
0.1
0.8OCI Nitrogen
466.9
267.5OCI Methanol Marketing B.V.
-
4.0OCI Fuels B.V.
-
3.4OCI Personnel B.V.
0.1
-N7
127.5
-OCI Fertilizers B.V.
17.7
1.1Sub-total subsidiaries
612.3
277.2Total
2,119.4
2,937.9Non-current
1,124.1
2,660.7Current
995.3
277.2At 31 December
2,119.4
2,937.9Reference 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
2021 2020
Balance at 1 January
2,937.9
2,734.5Proceeds from borrowings
909.2
1,675.0Proceeds from bank overdraft facility
398.4
-Proceeds from borrowings subsidiaries
600.6
145.9Proceeds from borrowings subsidiaries in kind
-
113.7Redemptions of borrowings
(2,401.2)
(1,756.1)Redemptions of borrowings subsidiaries
(8.0)
-Redemptions of borrowings subsidiaries in kind
(267.3)
(114.1)Newly incurred transaction costs
(0.1)
(9.3)Amortization of transaction costs / (bond) premiums
23.5
24.4Effect of movement in exchange rates
(73.8)
123.8Accrued interest
0.2
0.1At 31 December
2,119.4
2,937.9Proceeds from borrowings
Proceeds from borrowings in 2021 totaled an amount of USD 909.2
million (2020: USD 1,675.0 million).
Reference is made to note 18 of the consolidated financial statements.
Redemptions of borrowings subsidiaries in kind
Redemptions of borrowings from subsidiaries in kind of USD 267.3 million consist of contributions to
OCI Chemicals B.V. by settlement of loans.
The maturity dates of loans and borrowings from third-party and related party are as follows
$ millions
2021 2020
2021
-
-2022
383.0
-2023
400.0
350.02024
-
1,455.72025
733.3
889.0Sub-total
1,516.3
2,694.7Deducted transaction costs
(9.2)
(34.0)Total
1,507.1
2,660.7Specification of loans and borrowings from subsidiaries:
$ millions Type Interest %
2021
Long-term
2021
Short-term
2020
Long-term
2020
Short-term
OCI Overseas
Holding Ltd.
Unsecured LIBOR + 3.25 0.8
- 0.1
-OCI Nitrogen Unsecured 0.05% -
- -
-OCI Nitrogen Unsecured Deposit rate 0% 267.5
- 466.9
-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
- -
-N7 Unsecured Deposit rate 0% -
- 127.5
-OCI Fertilizers B.V. Unsecured Deposit rate 0% -
- 17.7
-OCI Personnel B.V. Unsecured Deposit rate 0% -
- 0.1
-Total 277.2
- 612.3
-NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
OCI N.V.
Annual Report 2021
192Parent Company Financial Statements
Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
48. Other payables
$ millions
2021 2020
Payables due to subsidiaries
192.7
22.9Accrued interest
6.2
18.8Commodity derivative financial instruments
8.8
10.9Other current liabilities
14.1
12.8Total
221.8
65.4Non-current
-
-Current
221.8
65.4Total
221.8
65.4The carrying amount of ‘Other payables’ approximates its fair value.
49. Revenue from dividend income
Revenue from dividend income in 2021 consists of USD 1,322.2 million from OCI Intermediate of which
USD 1,322.2 million was in cash.
50. Development of general and administrative expenses
a. Expenses by nature
$ millions Note
2021 2020
Employee benefit expenses (b)
21.0
15.8Depreciation
0.9
0.8Consultancy expenses
9.7
12.5Other
5.0
1.6Total
36.6
30.7The expenses by nature comprise ‘general and administrative expenses’.
b. Employee benefit expenses
$ millions
2021 2020
Wages and salaries
8.0
5.5Social securities
0.4
0.3Employee profit sharing
3.0
1.5Pension cost
1.1
0.6Share-based compensation expense
8.5
7.9Total
21.0
15.8For specifications on share-based payments, reference is made to note 22c of the notes to the
consolidated financial statements.
51. Other income
$ millions
2021 2020
Reversal of impairment of subsidiaries
1,417.7
-Other
0.2
0.1Total
1,417.9
0.152. Other expenses
$ millions
2021 2020
Impairment of subsidiaries
-
1,008.6Other
40.6
21.5Total
40.6
1,030.1Other expenses relate to recharges from subsidiaries, mainly OCI UK Ltd. Reference is made to note 41
for the impairment of subsidiaries.
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
OCI N.V.
Annual Report 2021
193Parent Company Financial Statements
Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
53. Net finance cost
$ millions
2021 2020
Interest income on loans and receivables third-party
0.1
0.1Interest income on loans and receivables subsidiaries
70.2
65.7Foreign exchange gain
98.5
169.3Finance income
168.8
235.1Interest expense and other financing costs on financial liabilities measured
at amortized cost third-party
(160.5)
(198.2)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
(0.4)
(0.2)Foreign exchange loss
(202.6)
(86.3)Finance cost
(363.5)
(284.7)Net finance (cost) recognized in profit or loss
(194.7)
(49.6)Foreign exchange gain / (loss) include a net loss of USD 72.8 million on foreign exchange derivatives
which were settled during the year.
54. Income taxes
54.1 Income tax in the statement of profit or loss
$ millions
2021 2020
Current tax
21.4
12.7Deferred tax
10.5
(9.4)Total income tax in profit or loss
31.9
3.3Current tax
$ millions
2021 2020
Current year
21.4
12.5Changes in estimates relating to prior years
-
0.2Income tax benefit / (expense) in profit or loss
21.4
12.7Deferred tax
$ millions
2021 2020
Origination and reversal of temporary differences
0.3
0.3Changes in tax rates
1.0
-Unrecognized tax assets
-
(9.7)Recognition of previously unrecognized tax losses
9.2
-Income tax benefit / (expense) in profit or loss
10.5
(9.4)54.2 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
2021
%2020
%Profit / (loss) before income tax
2,468.2
(933.4)Enacted income tax rate in the
Netherlands
25%
25%
Tax calculated at statutory tax rate 25.0
(617.0) (25.0)
233.4Reversal of impairment / (impairment)
of subsidiaries (27.0)
354.4 14.4
(252.2)Expenses non-deductible
1
(46.3) (1.8)
(12.6) (1.3)
Income not subject to tax
2
330.6 13.3
44.2 4.7
Change in income tax rates -
1.0 0.0
-Unrecognized tax assets (1.0)
- -
(9.7)Recognition of previously unrecognized
tax losses -
9.2 0.4
-Changes in estimates relating to prior
years -
- -
0.2Total income tax in profit or loss 0.4
31.9 1.3
3.31
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 2021 of USD 1,322 million gross.
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
OCI N.V.
Annual Report 2021
194Parent Company Financial Statements
Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
54.3 Deferred income tax assets and liabilities
Changes in deferred tax assets and liabilities:
$ millions
2021 2020
At 1 January
(1.2)
4.8Profit or loss
10.5
(9.4)Effect of movement in exchange rates
-
-Other
(3.8)
3.4At 31 December
5.5
(1.2)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
2021 2020 2021 2020 2021 2020
Trade and other
receivables
-
-(0.3)
(0.4)(0.3)
(0.4)Loans and borrowings
-
-(0.6)
(1.1)(0.6)
(1.1)Trade and other payables
-
0.3-
--
0.3Operating losses carry
forward and tax credits
6.4
--
-6.4
-Total
6.4
0.3(0.9)
(1.5)5.5
(1.2)Netting of fiscal positions
(0.9)
(0.3)0.9
0.3-
-Amounts recognized
in the Statement of
Financial Position
5.5
--
(1.2)5.5
(1.2)Of the deferred tax liabilities at 31 December 2021, an amount of USD 0.3 million is to be settled within
12 months.
Expiration scheme of gross unrecognized carry forward tax losses:
2021
$ 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
- - - - - -
-
Unrecognized
operating losses
carry forward
- - - -
-
--
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 - - - -
-
41.641.6
Unrecognized
operating losses
carry forward
-
41.6- - - -
41.6NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
OCI N.V.
Annual Report 2021
195Parent Company Financial Statements
Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
55. 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 2021:
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 Egypt
OC group
company
-
- 0.3 - - - - -
Residencia Europe
Ltd
Related via
shareholder
0.6
0.2 - - - - - -
Nassef Sawiris
Executive
Chair
-
- 0.7 0.4 - - - -
NNS Luxembourg
Sarl
Related via
shareholder
-
- 0.2 - - - - -
Total
0.6 0.2 1.2 0.4 - - - -
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
Nassef Sawiris
Executive
Chair 0.7 0.2 - - - -
-
-NNS Luxembourg
Sarl
Related via
shareholder
-
- 0.2 0.2 - - - -
Total
- - 0.9 0.4 - - - -
The current accounts consist of management fees, transferred cost and other.
All outstanding related party balances are unsecured.
56. Contingencies
Guarantees
OCI has provided financial guarantees to certain subsidiaries including OCI Nitrogen related to its
inventory financing. For OCI Chemicals, BioMCN and OMM B.V. a comfort letter was provided by OCI.
The Company has a guarantee facility with Rabobank for a maximum guarantee amount of EUR 200.0
million (USD 227.4 million). Under this guarantee facility, EUR 7.4 million (USD 8.4 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 EUR 100.0 million (USD 113.7 million). Under this guarantee facility,
EUR 68.8 million (USD 78.2 million) has been drawn. The facility is used to issue a performance
guarantee on behalf of OCI Nitrogen B.V..
The Company also has a guarantee facility with BNP for an amount of USD 89.4 million, that is fully
drawn.
57. Employees
The total number of employees in 2021 was 44 (2020: 29 employees).
58. 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.
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
OCI N.V.
Annual Report 2021
196Parent Company Financial Statements
Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
59. Subsequent events
OCI proposed semi-annual dividend distribution
On 15 February 2022 OCI announced a proposed payment of an interim distribution for the period H2
2021 of EUR 1.45 per share (or c.USD 350 million including a USD 200 million base). OCI is convening
an extraordinary shareholders meeting (EGM) on 28 March 2022 to resolve on the distribution through
a repayment of capital with an option to shareholders to elect for a dividend distribution instead,
resulting in a distribution to shareholders scheduled for June, subject to a statutory two-month creditor
opposition period.
OCI Methanol Group dividend distribution
In February 2022, the OCI Methanol Group Board of Directors approved dividends of USD 420
million, which were paid out to OCI Methanol Group shareholders, OCI (USD 357 million) and minority
shareholders (USD 63 million), on 22 February 2022.
Amsterdam, the Netherlands, 18 March 2022
The OCI N.V. Board of Directors
Michael Bennett
Nassef Sawiris
Ahmed El-Hoshy
Hassan Badrawi
Maud de Vries
Sipko Schat
Jérôme Guiraud
Robert Jan van de Kraats
Gregory Heckman
Anja Montijn-Groenewoud
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 2021
197Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
OCI N.V.
Annual Report 2021
197OTHER 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.
7.
OTHER
INFORMATION
OCI N.V.
Annual Report 2021
199Strategy and
value creation Sustainability
Corporate
governance
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performance
Risk management
and compliance
Financial
statements
Other
information
INDEPENDENT AUDITOR’S REPORT
To: the General Meeting of Shareholders and the Supervisory Board of OCI N.V.
Report on the audit of the nancial statements 2021 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 2021 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 nancial statements 2021 of OCI N.V. (the Company) based in
Amsterdam, the Netherlands.
The nancial statements comprise:
1 the consolidated and parent company statement of nancial position as at 31 December
2021;
2 the following consolidated and parent company statements for 2021: the statement of prot
or loss and other comprehensive income, changes in equity and cash ows; 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).
Our audit procedures were determined in the context of our audit of the nancial statements
as a whole. Our observations in respect of going concern, fraud and non-compliance with laws
and regulations, climate and the key audit matters should be viewed in that context and not as
separate opinions or conclusions.
We believe the audit evidence we have obtained is sufcient and appropriate to provide a basis
for our opinion.
OCI N.V.
Annual Report 2021
200Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
INDEPENDENT AUDITOR’S REPORT
CONTINUED
Audit approach
Summary
Materiality
Consolidated financial statements
– Materiality of USD 42.5 million
– 0.7% of consolidated revenue amounting to USD 6,318.7 million
Parent company financial statements
– Materiality of USD 57 million (EUR 50 million)
– 0.6% of parent company total assets amounting to USD 9,619.3 million
Group audit
– Audit coverage of 99% of total assets
– Audit coverage of 99% of revenue
Going concern, Fraud/Noclar and Climate
– Going concern: no significant going concern risks identified
– Fraud & Non-compliance with laws and regulations (Noclar), significant risks identified:
management override of controls (presumed risk) and revenue recognition in relation to
manual override of sales cut-off and non-routine sales transactions (presumed risk)
– Climate: management’s response to possible future effects of climate change and their
anticipated outcomes have been disclosed. We have considered the impact of climate-
related risks on our identification and assessment of risks of material misstatement in the
financial statements.
Key audit matters
– Initial Public Offering (‘IPO’) of Fertiglobe plc
– Litigation and claims
– Recoverable amount in impairment tests
Opinion
Unqualified
Materiality
Based on our professional judgement we determined the materiality for the consolidated
nancial statements as a whole at USD 42.5 million (2020: USD 30 million) and for the parent
company nancial statements as a whole at USD 57 million (EUR 50 million) (2020: USD
60 million (EUR 50 million)). Materiality for the consolidated nancial statements increased
compared to last year due to the improved nancial performance of the Company.
The materiality for the consolidated nancial statements is determined with reference to the
consolidated revenue, of which it represents 0.7% (2020: 0.8%). We deem prot before tax
from continuing operations as not representative because the benchmark has historically
been negative and/or highly volatile. As such, we consider revenues as the most appropriate
benchmark as the Company is result oriented.
The materiality for the parent company nancial statements is determined with reference to the
parent company’s total assets, of which it represents 0.6% (2020: 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 company nancial statements for
qualitative reasons.
We agreed with the Board of Directors that misstatements identied during our audit in excess
of USD 1.5 million of the consolidated and parent company nancial statements, would be
reported to them, as well as smaller misstatements that in our view must be reported on
qualitative grounds.
OCI N.V.
Annual Report 2021
201Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
INDEPENDENT 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 nancial statements of OCI N.V.
Our group audit mainly focused on signicant components, including a signicant equity
accounted investment. To ensure sufcient coverage over the group’s nancial information,
we have requested 15 component auditors (2020: 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 (2020: 4 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 reasonably possible.
We have 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 made changes to the audit approach to evaluate
the component auditors’ communications and the adequacy of their work. 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.
The audit coverage as stated in the section summary can be further specied as follows:
Audit response to going concern – no signicant going concern risks identied
The Board of Directors has performed its going concern assessment and has not identied any
signicant going concern risks. To assess the Board’s assessment, we have performed, amongst
others, the following procedures:
- we considered whether the Board of Directors’ assessment of the going concern risks includes
all relevant information of which we are aware as a result of our audit;
- we analysed the operating results forecast and the related cash ows compared to the
previous nancial year, developments in the business sector and any information of which we
are aware as a result of our audit;
- we inspected the nancing agreements in terms of conditions that could lead to signicant
going concern risks, including the terms of the agreement and any covenants; and
- we analysed whether the headroom of the ratios included in the nancing agreements is
sufcient or if it gives rise to the risk of any of the covenants in the nancing agreement being
breached.
The outcome of our procedures did not give reason to perform additional audit procedures on
management’s going concern assessment. We did not identify any signicant going concern risks.
90%
Audit of the complete
reporting package
Total assets
Revenue
8%
Audit of specic
items
1%
Specied audit
procedures
91%
Audit of the complete
reporting package
0%
Audit of specic items in
revenue is not applicable
8%
Specied audit procedures
OCI N.V.
Annual Report 2021
202Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Audit response to the risk of fraud and non-compliance with laws and regulations
In the chapter ‘Risk Management and Compliance’ of the Annual Report, the Board of Directors
describes its procedures in respect of the risk of fraud and non-compliance with laws and
regulations.
As part of our audit, we have gained insights into the Company and its business environment,
and assessed the design and implementation of the Company’s risk management in relation
to fraud and non-compliance. Our procedures included, among other things, assessing the
Company’s Code of Conduct, Whistle-blower policy, Insider Trading & Market Abuse policy,
Anti-bribery and Corruption policy, Competition policy, Privacy and data policy, Human Rights
policy, Business Parter Code of Conduct and Sanctions Policy to investigate indications
of possible fraud and non-compliance. Furthermore, we performed relevant inquiries with
management, those charged with governance and other relevant functions.
As part of our audit procedures, we:
- held quarterly meetings to perform inquiries with the Audit & Risk, Legal and the Compliance
department on group level and with local management by our component auditors;
- evaluated internal reports (including reports from the Audit & Risk and Compliance
departments) on indications of possible fraud and non-compliance (both on group and
component level);
- requested our component auditors to submit to us a ‘Questionnaire bribery and fraud,
compliance with laws and regulations’ to assist in completing our risk assessment
procedures;
- requested and evaluated legal conrmation letters, at group and component level; and
- obtained an understanding of ‘risk rate’, a tool which is used by the Company to screen third
parties for potential fraud and/or non-compliance risks.
In addition, we performed procedures to obtain an understanding of the legal and regulatory
frameworks that are applicable to the Company and identied the following areas as those
most likely to have a material indirect effect on the nancial statements:
- health and safety regulation;
- environmental regulation;
- anti-bribery and corruption laws and regulations;
- anti-money laundering laws and regulations; and
- trade sanctions and export controls laws and regulations.
We, together with our forensics specialists, evaluated the fraud and non-compliance risk factors
to consider whether those factors indicate a risk of material misstatement in the nancial
statements.
Based on the above and on the auditing standards, we identied the following fraud risks
that are relevant to our audit, including the relevant presumed risks laid down in the auditing
standards, and responded as follows:
- Management override of controls (a presumed risk)
Risk:
fraudulent nancial statements by overriding controls that otherwise appear to be
operating effectively.
Responses by us, including the work of our component auditors:
and non-compliance risks, such as processes related to journal entries.
and postings with a unusual character and evaluated key estimates and judgments for
bias by the Company’s management, including retrospective reviews of prior years’
estimates with respect to the valuation of xed assets, goodwill, investment in subsidiaries
(standalone), deferred tax assets and provisions. 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, including testing of transactions
back to source information.
(immaterial) balances and transactions at out-of-scope entities.
INDEPENDENT AUDITOR’S REPORT
CONTINUED
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Annual Report 2021
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Other
information
INDEPENDENT AUDITOR’S REPORT
CONTINUED
- Revenue recognition (a presumed risk)
Risk:
routine sales transactions.
Responses by us, including the work of our component auditors:
the implementation and, where considered appropriate, tested the operating effectiveness
of internal controls.
transactions and sales reversal transactions surrounding cut-off to address the signicant
risk with regards to fraudulent revenue recognition, including:
supporting documentation such as goods shipped, services performed, prices invoiced,
sales contracts, bill of loadings, shipping documents, proof of delivery, and proof of
acceptance. For the items selected it was determined whether sales and the related
receivables have been recorded in the correct accounting period and for the correct
amount.
whether these were recorded in the correct reporting reported.
identied, gained an understanding about the performance obligations which determine
the moment of revenue recognition and obtained supporting documentation for all non-
routine transactions as part of the journal entry testing audit procedures.
Our procedures to address the identied risks of fraud and non-compliance with laws and
regulations did not result in a key audit matter.
We communicated our risk assessment, audit responses and results to management and the
Audit Committee of the Board of Directors. Our audit procedures did not reveal indications and/
or reasonable suspicion of fraud and non-compliance that are considered material for our audit.
Audit response to climate-related risks
The Board of Directors is responsible for preparing the nancial statements in accordance with
The Board of Directors is responsible for preparing the nancial statements in accordance with
the applicable nancial reporting framework, including considering whether the implications
from climate-related risks and commitments have been appropriately accounted for and
disclosed.
The Board of Directors has performed its analysis of the impact of climate-related risks on the
company’s business and operations on the longer term and on its accounting in the current
nancial statements. In chapter ‘Sustainability’ of the Annual Report, the Board of Directors
concluded that the effect of climate-related risks do not have a material impact on accounts and
disclosures, including judgements and estimates in the nancial statements.
The evaluation of the effectiveness of management’s strategy and action plan to meet internal
or external goals set is not in scope of our audit of the nancial statements. As part of our
audit we consider potential effects of climate-related risks on the accounts and disclosures,
including estimates and judgements in the current year’s nancial statements to determine
whether the nancial statements are free from material misstatements. This includes discussion
of the company’s strategy and risk assessment process in relation to climate change with
management and those charged with governance and inspecting minutes and external
communications for signicant climate related commitments, strategies and plans made by the
Board of Directors. Also, we have requested our component auditors to assist us in providing
insight in (upcoming) country specic legislation on climate-related matters and the risks
thereof.
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.
Compared to last year the key audit matter with respect to the Initial Public Offering of
Fertiglobe plc has been added. Furthermore, due to the improved (forecasted) nancial results
the key audit matter related to the recoverable amount in impairment tests is now only related
to a single cash generating unit and the valuation of the subsidiaries in the parent company
nancial statements. No other changes were identied.
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information
#1 Initial Public Offering of Fertiglobe plc
Description
As disclosed in note 17 of the financial statements the Initial Public Offering (‘IPO’) of
13.8% of the shares in Fertiglobe plc (hereafter: Fertiglobe) at the Abu Dhabi Stock
Exchange (‘ADX’) was completed on 27 October 2021. Fertiglobe is the holding entity of
the Company’s fertilizer business in the MENA region. The listed shares were previously
owned by the Company and ADNOC, both remain shareholders after the IPO. The most
significant accounting matter is the assessment whether the Company remained in control
and can continue to consolidate Fertiglobe given the changes to the ownership, structure
and governance at Fertiglobe (post IPO). This also requires judgement from management.
Furthermore the accounting treatment, including the presentation, of the (leveraged) dividend
and the IPO proceeds is a relevant matter. These matters, together with the intensity of such
a process and the various parties involved, made this transaction significant to our audit.
Our response
A significant portion of the Company’s operations are included in Fertiglobe. In the structure
before the IPO the Company owned 58% of the shares in Fertiglobe. The ownership,
combined with the formalised shareholder agreements resulted in the position that the
Company had control over Fertiglobe and thus 100% of the activities were consolidated. The
IPO resulted in a decrease of the shareholder to 50% and led to changes in the governance,
the Company assessed whether it retained control over Fertiglobe.
W
e performed the following procedures:
- We evaluated the design and implementation of relevant controls related to the client
procedures for preparing the control assessment;
- We obtained the assessment prepared by management discussing relevant changes with
potential impact on the control question;
- We determined whether the assessment was performed in accordance with IFRS 10;
- We added an specialised team member to our engagement team assisting us in assessing
the technical aspects of the control assessment and the conclusion that OCI remained in
control over the activities of Fertiglobe;
- We inspected the legal documentation to determine whether relevant aspects were
considered as part of the control assessment; and
- We assessed the appropriateness of the disclosure as included in the consolidated financial
statements.
#1 Initial Public Offering of Fertiglobe plc
(continued)
Prior to the IPO, dividends were declared and distributed to the shareholders – these
dividends were based on accumulated realised profits which were not yet distributed.
Furthermore, the IPO proceeds were also distributed to the (ultimate) shareholders. Due to
the legal structure of the Company and the accounting policy applied in the parent company
financial statements for the account investment in subsidiaries (accounted at cost) the
proceeds are classified as dividend income in the parent company financial statements.
From a consolidated perspective the only visible impact relates to the measurement of the
non-controlling interest. We inspected the related legal documentation and assessed the
accounting treatment.
As explained above, the presentation of the activities of Fertiglobe are impacted by significant
portions of non-controlling interests. Not only at the level of Fertiglobe third parties are
participating but also at individual entities within the Fertiglobe group. The IPO had a
significant impact on the calculation of non-controlling interest.
Our observation
We determined that the accounting treatment of the various topics described above are
reasonable and in accordance with IFRS:
-
We agree with the conclusion that OCI remained in control over the activities of Fertiglobe
and its subsidiaries.
-
We determined that the declared dividends are accounted for in accordance with the
supporting documentation and that the identification of the proceeds as dividend income
are correct.
-
We determined through recalculation that the updated percentages of non-controlling
interest in the consolidated statement of financial position and in the consolidated statement
of profit or loss and other comprehensive income of the Company are appropriate and
mathematical accurate.
-
Furthermore we concluded that the disclosure (reference is made to Note 17) is adequate.
INDEPENDENT AUDITOR’S REPORT
CONTINUED
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information
INDEPENDENT AUDITOR’S REPORT
CONTINUED
#2 Litigation and claims
Description
As disclosed in Provisions (Note 21) and Contingencies (Note 28) the Company has several
pending litigations and claims (related to legal and tax matters), for which the outcome is
uncertain. Inherent to the Company’s nature and operations, as well as its geographical
spread, the Company is exposed to an indirect material effect on pending legal cases. 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:
- Obtained the quarterly updated Litigation report from Group Legal;
- Performed quarterly update meetings with Group Legal, Compliance and Tax;
- Instructed our component auditors to perform procedures over litigations and claims on a
local level, including:
• Requested certain component auditors to visit local courts to confirm the status of
certain cases;
• Evaluated the legal expenses and requested external legal letters for lawyers involved
in litigations and claims (group and component level);
• Obtained internal position papers from management on the cases pending (group and
component level); and
• Requested external expert opinions for cases with a significant exposure.
- Assessed the adequacy of the disclosure to the financial statements.
Our observation
and the recording of related provisions to be reasonable. Furthermore, we determined that
the related disclosure with regards to Provisions (Note 21) and Contingencies (Note 28) are
adequate.
#3 Recoverable amount in impairment tests
Description
As described in Note 7, management has performed an impairment test in order to determine
the impairment loss following the shutdown of the production facilities of BioMCN.
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 recoverable amount based on
the individual cash generating units’ value in use. This requires estimation in respect of key
assumptions used in the value in use models such as:
- production volumes;
- forecasted methanol prices;
- forecasted natural 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 reverse 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.
In respect of the valuation of BioMCN, the determination of the recoverable amount is
considered to be significant to our audit due to management judgement involved in the
assumptions used. This also resulted in the identification of this key audit matter.
Our response
We evaluated the design and implementation of relevant controls related to the client
impairment assessment. We reviewed the valuation model 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.
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 management’s
business plans and amongst others:
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#3 Recoverable amount in impairment tests
(continued)
Our response (continued)
- compared the production volumes with the historical average’s and forecasted impact of
(planned) shut-downs;
- compared the forecasted methanol prices with forward prices as published by pricing
agencies;
- compared the forecasted natural gas price with forward gas prices as published by pricing
agencies; and
- involved KPMG valuation specialist to assess the reasonability of the applied methodology
in deriving the recoverable amount, accuracy of the impairment model and to assess the
reasonableness of the WACC and terminal growth rate.
We furthermore focused on the sensitivity of the beforementioned assumptions, by evaluating
the impact of a reasonably possible change in assumptions which could materially impact the
estimated recoverable amount. We also assessed the historical accuracy of management’s
estimates and we assessed the adequacy of the disclosure (Note 7) to the consolidated
financial statements.
In our audit we evaluated the management’s procedures with regards to the valuation
of subsidiaries based on their fair value less cost of disposal. A reversal of cumulative
impairments from prior years amounting to USD 1,418 million has been recorded. The
reversed impairment has been determined based on the cost value of the subsidiaries and
the market capitalisation of the group, adjusted for net debt and a 30% control premium.
We involved KPMG valuation specialists to support the audit team in determining the
appropriateness of this calculation. 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 BioMCN
impairment test (Note 7) 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 for the
management report and other information.
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.
INDEPENDENT AUDITOR’S REPORT
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information
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 25
May 2021, for the year 2021. Our rst appointment as statutory auditor of the Company was
in 2013 to audit the 2013 Annual Report. As a consequence of the mandatory rm rotation
legislation, the year 2022 will be the last year that we can be appointed.
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.
European 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 tagging’s 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. In that respect the Board of
Directors is responsible for the prevention and detection of fraud and non-compliance with
laws and regulations, including determining measures to resolve the consequences of it and
to prevent recurrence.
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, 18 March 2022
KPMG Accountants N.V.
C.A. Bakker RA
INDEPENDENT AUDITOR’S REPORT
CONTINUED
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Annual Report 2021
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INDEPENDENT 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 the 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
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 profit / (loss)
• Free cash flow
EBITDA, adjusted EBITDA, adjusted net profit / (loss) 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 profit / (loss) 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 profit / (loss) 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 profit / (loss) 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, amortization
and impairment, 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 profit / (loss)
Adjusted net profit / (loss) is the total net profit / (loss), 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 OCI
shareholders 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 2021 2020
Operating profit
1,562.8
187.0Depreciation, amortization and impairment
891.6
592.2EBITDA
2,454.4
779.2APM adjustments
72.1
90.6Adjusted EBITDA
2,526.5
869.8APM adjustments at EBITDA level
$ million 2021 2020
Natgasoline
94.5
65.9Unrealized result natural gas hedging
(10.0)
(8.6)Unrealized result EUA derivatives
(1.7)
-Gain on purchase related to Fertiglobe
-
(13.3)Hurricane Laura
-
10.0Mandatory inspection at OCI Nitrogen
-
7.2Other including provisions
(10.7)
29.4Total APM adjustments at EBITDA level
72.1
90.6 OCI N.V.
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ALTERNATIVE PERFORMANCE
s
CONTINUED
The main APM adjustments at EBITDA level in 2021 and 2020 relate to:
• Natgasoline is not consolidated and an adjustment of USD 94.5 million was made for OCI’s 50%
share in the plant’s EBITDA in 2021. Natgasoline’s contribution to adjusted EBITDA in 2020 was USD
65.9 million.
• The unrealized results on natural gas hedge derivatives of USD (10.0) million in 2021 and USD (8.6)
million in 2020 relate to hedging activities at OCI Beaumont and in the Netherlands.
• The unrealized results on EUA derivatives of USD (1.7) million in 2021 relate to the unrealized gain on
EUA hedges at OCI Nitrogen and BioMCN.
• 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 in 2020.
• 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 was USD
10.0 million in 2020.
• 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 in 2020.
• Other adjustments of USD (10.7) million in 2021 and USD 29.4 million in 2020 mainly relates to
movements in provisions related to ongoing litigation and claims.
$ million 2021 2020
Reported net profit / (loss) attributable to owners of the Company
570.5
(177.7)Adjustments at EBITDA level
72.1
90.6Exclude: Natgasoline EBITDA adjustment
(94.5)
(65.9)Adjustment result from associate (unrealized gas hedging Natgas)
(12.2)
(13.5)Forex (gain) / loss on USD exposure
1.4
(108.5)Non-controlling interests adjustment / release interest accrual / uncertain
tax positions
34.1
8.8
Impairment of BioMCN
278.3
-Recognition of previously unused tax losses
(197.2)
-Accelerated depreciation / deactivation assets
22.4
2.2Expenses related to refinancing
61.7
51.3Tax effect of adjustments
(4.8)
(0.7)Total APM adjustments at net profit / (loss) level
161.3
(35.7)Adjusted net profit / (loss) attributable to owners of the Company
731.8
(213.4)The main APM adjustments at net profit / (loss) level in 2021 and 2020 relate to:
• The adjustment on result from associate of USD (12.2) million in 2021 and USD (13.5) million in 2020
mainly relates to the unrealized results on natural gas hedge derivatives at Natgas.
• FX impact of USD 1.4 million in 2021 and USD (108.5) million in 2020 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 interests adjustment of USD 34.1 million in 2021 and USD 8.8 million in 2020 is
related to the calculated profit attributable to non-controlling interests on all APM adjustments and the
impact of the disputed reinvestment obligations at Sorfert (USD 23.7 million after minorities).
• Impairment of USD 278.3 million in 2021 relates to the impairment of BioMCN.
• Recognition of previously unused tax losses of USD (197.2) million in 2021 relates to the recognition of
a deferred tax asset at Iowa Fertilizer Company (IFCo).
• Accelerated depreciation of USD 22.4 million in 2021 relates to the accelerated depreciation of the
shiploader at Fertil (USD 10.5 million), write down of project costs at BioMCN (USD 3.7 million) and
write down of ERP system and furniture and leasehold improvements at Fertil (USD 8.2 million).
• Refinancing expenses of USD 61.7 million in 2021 and USD 51.3 million in 2020 relates to early
redemption costs and accelerated amortization, mainly at OCI N.V. and IFCo.
• Tax effect of adjustments of USD (4.8) million in 2021 and USD (0.7) million in 2020 is related to the
calculated tax effect of all APM adjustments.
Free cash flow
$ million 2021 2020
Cash flow from operating activities
2,264.1
617.8Maintenance capital expenditure
(225.4)
(239.4)Lease payments
(38.8)
(37.3)Dividends from equity accounted investees
2.7
3.0Dividends paid to non-controlling interests
(442.7)
(43.2)Sorfert reinvestment case
29.7
-Other non-operating items
4.3
3.8Free cash flow
1,593.9
304.7 OCI N.V.
Annual Report 2021
210Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
GRI
indicator
Disclosure Response
2-1 Organizational details OCI at a glance, page 5
2-2
Entities included in the organization’s
sustainability reporting
Note 34 of the financial statements, Our Approach to Sustainability Reporting, page 37
2-3
Reporting period, frequency
and contact point
Year ended 31 December 2021, investor[email protected]
2-4
Restatements of information Any exceptions, restatements, or changes to data reported are noted where applicable
2-5
External assurance Financial information is audited, see auditor's report on page 199. 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.
2-6
Activities, value chain and other business
relationships
How we create value, page 24
2-7
Employees Employees, pages 72-74
2-8
Workers who are not employees
Health and Safety, pages 75-79
2-9
Governance structure and composition Corporate Governance report, pages 95-109, Our Approach to Sustainability Governance, page 81
2-10
Nomination and selection of the highest
governance body
Corporate Governance report, pages 95-109
2-11
Chair of the highest governance body Board Profile, pages 96-99
2-12
Role of the highest governance body in
overseeing the management of impacts
Board Profile, pages 96-99, Our Approach to Sustainability Governance, page 81
2-13
Delegation of responsibility for managing
impacts
Our Approach to Sustainability Governance, page 81
2-14
Role of the highest governance body in
sustainability reporting
Our Approach to Sustainability Governance, page 81
2-15
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.
2-16
Communication of critical concerns Board Report, pages 100-109
2-17
Collective knowledge of the highest
governance body
Board Report, pages 100-109
General disclosures
OCI N.V.
Annual Report 2021
211Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
GRI
indicator Disclosure Response
2-18 Evaluation of the performance of the highest
governance body
Board Report, pages 100-109
2-19
Remuneration policies Remuneration Report, pages 110-124
2-20
Process to determine remuneration Remuneration Report, pages 110-124
2-21
Annual total compensation ratio Remuneration Report, pages 110-124
2-22
Statement on sustainable development
strategy
Sustainability report, pages 35-81
2-23
Policy commitments Sustainability report, pages 35-81
2-24
Embedding policy commitments Sustainability report, pages 35-81
2-25
Processes to remediate negative impacts Sustainability report, pages 35-81
2-26
Mechanisms for seeking advice and raising
concerns
Compliance Framework, page 92-93
2-27
Compliance with laws and regulations Compliance Framework, page 92-93
2-28
Membership associations Industry and Sustainability Partnerships, page 39
2-29
Approach to stakeholder engagement Stakeholder Engagement, page 38
2-30
Collective bargaining agreements Our employees, pages 72-74
General disclosures
continued
INDEX
CONTINUED
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212Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Topic-specific disclosures
GRI
indicator Disclosure Response
3-1 Process to determine material topics Our Material Topics, page 40
3-2 List of material topics Our Material Topics, page 40
3-3 Management of material topics Sustainability report, pages 35-81
Economic
201-1 Direct economic value generated and
distributed
How we create value for our communities, page 69
201-2 Financial implications and other risks and
opportunities due to climate change
Climate change risks and opportunities, page 46, Sustainability Report pages 35-81, strategy and value creation, page 10-24
Energy
302-1 Energy consumption within the organization GHG Emissions and Energy Use, page 61
302-3 Energy intensity GHG Emissions and Energy Use, page 61
Water and Effluents
303-1 Interactions with water as a shared resource Water and Waste, pages 62-65
303-2 Management of water discharge-related
impacts
Water and Waste, pages 62-65
303-3 Water withdrawal Water and Waste, pages 62-65
303-4 Water discharge Water and Waste, pages 62-65
303-5 Water consumption Water and Waste, pages 62-65
Emissions
305-1 Direct (Scope 1) GHG emissions GHG Emissions and Energy, page 61
305-2 Energy indirect (Scope 2) GHG emissions GHG Emissions and Energy, page 61
305-4 GHG emissions intensity GHG Emissions and Energy, page 61
305-5 Reduction of GHG emissions GHG Emissions and Energy, page 61
INDEX
CONTINUED
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213Strategy and
value creation Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Topic-specific disclosures
continued
GRI
indicator Disclosure Response
Employment
401-1 New employee hires and employee turnover Our employees, pages 72-74
Occupational health and safety
403-1 Occupational health and safety
management system
Health and safety, pages 75-79
403-8 Workers covered by an occupational health
and safety management system
Our employees, pages 72-74, Health and safety, pages 75-79
403-9 Work-related injuries Health and safety, pages 75-79
Diversity and equal opportunity
405-1 Diversity of governance bodies
and employees
Our employees, pages 72-74, Corporate Governance, pages 95-109
INDEX
CONTINUED
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214Strategy and
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performance
Risk management
and compliance
Financial
statements
Other
information
Category Disclosure Page
Governance (a) Describe the board’s oversight of climate-related risks and opportunities 81
Governance (b) Describe management’s role in assessing and managing climate-related risks and opportunities 81
Strategy (a) Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term 46-51
Strategy (b) Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning 46-51
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 46-51, 81
Risk Management (b) Describe the organization’s processes for managing climate-related risks 46-51, 83
Risk Management (c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management 81, 83-84
Metrics and Targets (a) Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process 47
Metrics and Targets (b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks 48, 218
Metrics and Targets (c) Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets 48-51
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Other
information
SUSTAINABILITY ACCOUNTING
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 (%)
218
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 49-51
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) 218
Energy management
RT-CH-130a. (1) Total energy consumed, (2) percentage grid electricity, (3) percentage renewable,
(4) total self-generated energy
Quantitative Gigajoules (GJ),
Percentage (%)
218
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 (%)
218
RT-CH-140a.2 Number of incidents of non-compliance associated with water quality permits, standards, and
regulations
Quantitative Number 219
RT-CH-140a.3 Description of water management risks and discussion of strategies and practices to mitigate
those risks
Discussion and analysis n/a 62-65
Hazardous waste management
RT-CH-150a.1 Amount of hazardous waste generated, percentage recycled Quantitative Metric tons (t),
Percentage (%)
218
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Other
information
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 38, 69-71, 79
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 219
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 75-78
Product design for use-phase efficiency
RT-CH-410a.1 Revenue from products designed for use-phase resource efficiency Quantitative Reporting currency 219
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 (%)
219
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 77
Genetically modified organisms
RT-CH-410c.1 Percentage of products by revenue that contain genetically modified organisms (GMOs) Quantitative Percentage (%) by revenue 219
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 219
RT-CH-540a.2 Number of transport incidents Quantitative Number 219
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 46, 77
Other
Activity metric
RT-CH-000.A Production by reportable segment Quantitative Metric tons (t) 218
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Other
information
Environmental performance Unit 2019 2020 2021 SASB reference
Energy (Ammonia)
Energy consumption TJ 211,541 206,033 200,556
Energy intensity GJ / ton gross production 36.64 36.36 36.05
Energy (consolidated)
Energy consumption TJ 288,817 293,846 283,605 RT-CH-130a.1
Energy intensity GJ / ton gross production 18.98 18.86 19.22
Grid Electricity % NPR 1.6% 1.5% RT-CH-130a.1
Renewable % NPR 0.7% 0.7% 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 9.50 9.20 9.55 RT-CH-110a.1
GHG emissions (Scope 1 - CO
2
to Downstream) Million tons of CO
2
e 4.93 5.32 4.65 RT-CH-110a.1
GHG emissions (Scope 2) Million tons of CO
2
e 0.62 0.66 0.65
Total GHG emissions
Million tons of CO
2
e
15.06 15.18 14.85
GHG intensity Ton CO
2
e / N-ton 2.37 2.31 2.34
Scope 1 emissions covered under emissions limiting regulations % (Scope 1 – Direct) 17.7% 16.0% 14.0% RT-CH-110a.1
NOx Metric tons 3,018 3,485 3,120 RT-CH-120a.1
N
2
O Metric tons 132 151 151 RT-CH-120a.1
SO
2
Metric tons 158 163 137 RT-CH-120a.1
VOCs
Metric tons 134 143 114 RT-CH-120a.1
Effluents and waste
Hazardous waste reused, recycled or recovered Metric tons 1.98 1.60 2.37 RT-CH-150a.1
Hazardous waste treated or disposed of Metric tons 1.27
1.50 1.62 RT-CH-150a.1
Non-hazardous waste reused, recycled or recovered Metric tons 1.80 1.86 2.75
Non-hazardous waste treated or disposed of Metric tons 18.90 27.33 14.16
Water*
Total intake by source 92.52 87.78
Million cubic meters
91.13RT-CH-140a.1
Groundwater Million cubic meters 17.34 17.89 16.22
Seawater Million cubic meters 49.43 48.00 46.21
Surface water Million cubic meters 20.71 20.74 19.71
Third party water 3.65 5.89 5.64
Total water discharge by destination 49.12 42.27
Million cubic meters
52.21RT-CH-140a.1
Groundwater Million cubic meters 4.77 4.62 2.35
Seawater Million cubic meters 41.17 37.88 31.05
Surface water Million cubic meters 1.25 1.43 2.38
Third party water Million cubic meters 5.02 5.19 6.49
Water Stress
Water withdrawn in regions with High or Extremely High Baseline Water Stress % 73% 71% 72% RT-CH-140a.1
Water consumed in regions with High or Extremely High Baseline Water Stress % 58% 57% 62% RT-CH-140a.1
Production
Total 6.58 6.36
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
HSE Unit 2019 2020 2021 SASB reference
Safety
Lost Time Injury Rate - total 0.09 0.20
Per 200,000 hours worked
0.16
Lost Time Injury Rate - employees Per 200,000 hours worked 0.07 0.06 0.20
Lost Time Injury Rate - contractors Per 200,000 hours worked 0.30 0.14 0.21
Total Recordable Injury Rate - total 0.23 0.35
Per 200,000 hours worked
0.40RT-CH-320a.1
Total Recordable Injury Rate - employees Per 200,000 hours worked 0.34 0.12 0.36 RT-CH-320a.1
Total Recordable Injury Rate - contractors Per 200,000 hours worked 0.49 0.42 0.33 RT-CH-320a.1
Fatalities # 0 0 1 RT-CH-320a.1
Process Safety Incidents 21 33
#
18RT-CH-540a.1
Process Safety Total Incident Rate 0.38 0.55
Per 200,000 hours worked
0.29RT-CH-540a.1
Significant Process Safety Incidents count 17 21 33 RT-CH-540a.1
Major Process Safety Incidents count 0 0 0 RT-CH-540a.1
Transport incidents # 0 0 0 RT-CH-540a.2
Environmental incidents
Environmental incidents
# 36 37 21
Environmental Incident Rate (EIR) Per 200,000 hours worked 0.59 0.66 0.35
Water-related permit exceedances* # 12 16 5 RT-CH-140a.2
Product design for use-phase efficiency
Revenue from products designed for use-phase resource efficiency Reporting Currency NPR $ 314 million $ 414 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% 38.6% RT-CH-410b.1
Percentage of such products by revenue that have undergone a hazard
assessment
% NPR 100% 100% RT-CH-410b.1
Genetically Modified Organisms (GMOs)
Percentage of products by revenue that contain GMOs % 0% 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.
ESG PERFORMANCE
SUMMARY
CONTINUED
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Other
information
Working at OCI Unit 2019 2020 2021
Employees*
Total employees
# 3,715 3,682 3,853
Full-time # 3,622 3,602 3,779
Part-time # 93 80 74
Engagement and development
Voluntary turnover rate % 2.0% 2.2% 2.7%
Employee absenteeism % 3.0% 1.9% 1.7%
Employees covered by Collective Bargaining orUnions** % 37.7% 38.7% 37.2%
Average spending on training and development
$ / employee 1,442 218 321
Compliance & Governance
Incident notifications # 12 9 12
Incidents investigated # 12 9 12
Substantial cases # 0 0 1
Anonymous notifications via hotline # 3 1 4
Cybersecurity training (various topics)** # employees reached 1,938 1,921 1,064
Compliance training (various topics, incl. CoC, ABC, Debiasing, Data privacy, and others)* # employees reached 973 2,002 1,865
Gender
Women 10.5% 11.4%
%
10.3%Women in technical roles % 1.1% 1.5% 3.3%
Women non-technical roles % 9.2% 9.0% 8.1%
Women on the Board of Directors % 16.7% 23.1% 23.1%
Women in leadership positions % 18.2% 20.2% 24.0%
Age profile
under 25 % 1.7% 1.9% 1.9%
25-34 % 21.3% 18.1% 20.8%
35-44 % 41.8% 42.1% 42.6%
45-54 % 22.3% 25.1% 23.0%
55-64 % 12.1% 11.9% 10.8%
65+ % 0.8% 0.9% 0.9%
Years of service
0-5 years % 27.3% 21.7% 25.2%
6-10 years % 25.3% 25.1% 25.0%
11-20 years % 36.8% 42.8% 39.7%
21+ years % 10.6% 10.4% 10.2%
* excl. Natgasoline
** Restated to reflect updated Fertiglobe figures for 2019 and 2020
ESG PERFORMANCE
SUMMARY
CONTINUED
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Other
information
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
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221Strategy and
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Other
information
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 2021, 46.88% 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’s Board has approved a new dividend / capital allocation policy, which combines a consistent
base return of capital of $400 million per year with an additional variable component linked to FCF
generated.
Going forward OCI intends to maintain an investment grade credit profile with a target of net
leverage below 2x through the cycle, and balance availability of funds and excess FCF for profit
distribution to shareholders while pursuing value accretive ESG and other growth opportunities.
Should the ratio of net debt to adjusted EBITDA exceed 1.5x then the variable component of the
capital returned will be adjusted to enable balancing capital returns to shareholders with growth
prospects and to ensure maintaining an investment grade credit profile.
Information in 2021
Number of outstanding ordinary shares as at 31 December 2021 210,306,101
Highest share price (EUR/share) 26.24
Average share price (EUR/share) 21.02
Lowest share price (EUR/share) 15.54
Share price at 31 December 2021 (EUR/share) 23.02
Market capitalization at 31 December 2021 (EUR billion) 4.84
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 2021:
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
38.78%
•
Yousriya Loza
Sawiris
5.78%
•
Samih Sawiris
8.55%
•
Melinda French-
Gates
8.41%
•
Remaining shares
38.47%
SHAREHOLDER INFORMATION
OCI N.V.
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Other
information