Dyno Nobel Limited · ASX:DNL
Dyno Nobel — H1 2022 Earnings Presentation
31 slides from Dyno Nobel's earnings presentation, May 23, 2022
Slide 1: 2022 Half Year Financial Results Presentation
2022 HALF YEAR FINANCIAL RESULTS PRESENTATION 23 May 2022 Incitec Pivot Limited ABN 42 004 080 264 ASX Code: IPL OTC: INCZY 1
Slide 2: Disclaimer
Disclaimer Summary information This presentation has been prepared by Incitec Pivot Limited (“IPL”). The information contained in this presentation is in summary form and is based on the businesses currently conducted by IPL, which may be subject to change, and is provided for information purposes o
Slide 3: Important Notice
Important Notice Forward looking statements This document contains certain “forward looking statements”. Forward looking words such as “expect”, “would”, “could”, “may”, predict”, “intend”, “will”, “believe”, “estimate”, “target” and “forecast” and other similar expressions are intended to identify
Slide 4: Acknowledgement of Country
ACKNOWLEDGEMENT OF COUNTRY “I begin today by acknowledging the Traditional Custodians of the land on which we meet today and I pay my respects to their Elders past and present. I extend that respect to Aboriginal and Torres Strait Islander peoples joining us today.” 44
Slide 5: Overview
OVERVIEW Jeanne Johns Managing Director & Chief Executive Officer 55
Slide 6: Zero Harm
Zero Harm Safety refresh program to reverse negative trend and address COVID-19 impacts Potential High Severity Incidents(2) Significant Environmental Incidents(1) Target: Sustainable Improvement 1 Target: Sustainable Target: Nil Improvement 33 34 36 17 0 0 0 0 FY19 FY20 FY21 1H22 1H20 FY20 1H21 FY2
Slide 7: 1H22 Overview
1H22 Overview Record first half result Earnings Before Interest & Tax Net Profit After Tax Dividend (EBIT) (NPAT) $568M Improved $384M Improved 10.0* cps(1)Improved from $110M in 1H21 from $36M in 1H21 * Fully Franked from 1.0 cps(1) in 1H21 Operating cashflow ROIC(2) Net Debt / EBITDA(3,4) ($79M) 1
Slide 8: Strong 1H22 strategy execution
Strong 1H22 strategy execution Capturing value and progressing transformational initiatives Capturing significant value through the Underlying business growth driven by cycle category leading companies ● Captured positive commodity price & FX tailwinds in 1H22 ● Business growth underpinning improvem
Slide 9: Strong 1H22 strategy execution (cont.)
Strong 1H22 strategy execution (cont.) Completion of current turnaround cycle to deliver reliability improvements Ammonia Reliability – Major Plants 100% 97% Early stage platform improvement as 90% 93% Target: 95% 1 turnarounds near completion 90% 83% 87% Baseline: 85% 1 Turnaround - Sep/Oct 80% ● T
Slide 10: Strong 1H22 strategy execution (cont.)
Strong 1H22 strategy execution (cont.) Technology driven growth with our businesses executing on our strategy Progressing strategy of delivering technology led growth Premium Emulsion (000’s metric tonnes sold) Electronic Initiating Systems (million units sold) ● Dyno Nobel: Continued global growth
Slide 11: Group Financial Results
GROUP FINANCIAL RESULTS Chris Opperman Interim Chief Financial Officer 11 11
Slide 12: Profit & Loss
Profit & Loss Best first half earnings on record delivering strong shareholder returns 1H22 1H21 Best first half earnings on record IPL Group(1) A$M A$M Change ⎔ Capturing the commodity upswing Revenue 2,548 1,724 48% ⎔ Continued customer and margin growth EBIT 568 110 416% Net Borrowing Costs down
Slide 13: Cash Flows
Cash Flows Strong cash generation expected to be realised in second half 1H22 1H21 Change EBITDA up 163% versus pcp Cash flow A$M A$M A$M ⎔ Strong operational cashflows from: EBITDA 751 286 465 ⎯ Commodities Interest paid (42) (62) 20 ⎯ Customer & Technology growth Tax paid (63) (15) (48) ⎯ Partiall
Slide 14: Focus on Balance Sheet Strength
Focus on Balance Sheet Strength Balance sheet deleveraging expected to continue in 2H22 Financial Indebtedness Strengthening and simplification now complete – targeting 3.5 maintenance of lower net debt 3.0 2.5 ⎔ Conservative Net Debt/EBITDA(1) of 1.0x A$ Billions 2.0 1.5 ⎔ Total financial indebtedn
Slide 15: Operating Performance
OPERATING PERFORMANCE Jeanne Johns Managing Director & Chief Executive Officer 15 15
Slide 16: Summary of Segment Financial Performance
Summary of Segment Financial Performance Strategy delivering excellent results in healthy market conditions EBIT 1H22 Performance Commentary A$ million 1H22 1H21 Change Dyno Nobel Americas 252 31 221 • DNA Explosives saw improved volumes across all sectors, with margins also moving higher. Manufactu
Slide 17: Dyno Nobel Americas Explosives
Dyno Nobel Americas Explosives Volumes, technology and margin improvement with inflation and supply chain disruptions being managed 1H22 performance overview EBIT of US$53M, 20% vs pcp ⎔ Volume growth across all sectors (vs. with pcp): Q&C up 9%, Metals up 2% and Coal up 17% EBIT of A$73M, 22% vs pc
Slide 18: Waggaman | Agriculture & Industrial Chemicals
Waggaman | Agriculture & Industrial Chemicals Waggaman Operations Agriculture & Industrial Chemicals (Ag & IC) Revenue of US$272M, 344% vs pcp Revenue of US$115M, 122% vs pcp EBIT of US$93M, from (US$18M) loss in pcp EBIT of US$37M, from (US$2M) loss in pcp ⎔ Increase primarily due to improv
Slide 19: Dyno Nobel Asia Pacific
Dyno Nobel Asia Pacific Solid volume and technology performance with international recovering 1H22 performance overview EBIT of A$79M 13% vs pcp ⎔ Strong growth in volumes (+7%) with revenue up across all markets ⎔ Excellent revenue growth from technology with EDS(1) +20% and premium emulsions +16%,
Slide 20: Fertilisers Asia Pacific
Fertilisers Asia Pacific The need for efficient application is supportive of our precision agriculture offerings EBIT of A$257M, $237M vs pcp 1H22 performance overview ⎔ Favourable prices captured in 1H22. In excess of $60M EBIT expected to be realised in 2H22 from unsold manufactured product on han
Slide 21: Outlook & Strategic Priorities
OUTLOOK & STRATEGIC PRIORITIES Jeanne Johns Managing Director & Chief Executive Officer 21 21
Slide 22: Outlook – 2H22
Outlook – 2H22 Two strong businesses – Positioned & strengthened for sustainable growth: ⎔ Dyno Nobel • Favourable market conditions more than offsetting supply chain and inflation pressure • Insurance proceeds from WALA incident expected to be received in 2H22 • Americas – Well placed for continued
Slide 23: Summary
Summary Relentless focus on execution Outlook is strong 2H22 priorities ⎔ Strong progress against strategic ⎔ Sustained underlying market growth ⎔ Continued focus on delivering strategy agenda 1. Safe & reliable operations ⎔ Continued above market growth and ⎔ Minimise distraction to businesses 2. C
Slide 24: Results: Questions & Answers
RESULTS: QUESTIONS & ANSWERS 24 24
Slide 25: Appendix - 1H22 Results
Incitec Pivot INNOVATION ON THE GROUND APPENDIX - 1H22 RESULTS
Slide 26: Group Result 1H22
Group Result 1H22 Group EBIT Movements (A$m) Increase Decrease Total EBIT of A$568M, 416% vs pcp 26
Slide 27: Dyno Nobel Americas – EBIT Waterfall
Dyno Nobel Americas – EBIT Waterfall Dyno Americas Increase Decrease Total 27
Slide 28: Dyno Nobel Asia Pacific – EBIT Waterfall
Dyno Nobel Asia Pacific – EBIT Waterfall Dyno Nobel Asia Pacific Increase Decrease Total 28
Slide 29: Fertilisers Asia Pacific – EBIT Waterfall
Fertilisers Asia Pacific – EBIT Waterfall Fertilisers Asia Pacific (A$m) Increase Decrease Total 29
Slide 30: WALA Incident Cost Analysis
WALA Incident Cost Analysis(1) 1H22 2H22 FY22 Total (1) A large proportion of the total cost (US$128m) is subject to an insurance claim under IPL’s Property Insurance Policy. The total retention under the policy (site deductible and self-insured component ) is US$40m. 30
Slide 31: End of Cycle Turnaround Schedule
End of Cycle Turnaround Schedule Plant FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 Phosphate Hill, QLD Cheyenne, WY Moranbah, QLD St, Helens Waggaman, LA 31