Dyno Nobel Limited · ASX:DNL
Dyno Nobel — Investor Day (September 2022)
122 slides from Dyno Nobel's investor day presentation, Sep 6, 2022
Slide 1: 2022 Investor Day Presentation
ASX RELEASE 2022 Investor Day Presentation 6 September 2022 Incitec Pivot Limited (ASX:IPL) is today holding an Investor Day in Sydney, Australia commencing at 9.30am (AEST). Enclosed are the presentation materials. A FY22 business performance update is provided on page 25. The Investor Day will be
Slide 2: Investor Day
INVESTOR DAY 6 September 2022 1
Slide 3: 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 4: Disclaimer
Disclaimer 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 forwa
Slide 5: Disclaimer
Disclaimer Third party data Certain market and industry data used in connection with this presentation may have been obtained from research, surveys or studies conducted by third parties, including industry or general publications. Neither IPL nor its representatives have independently verified any
Slide 6: Presenting today
Presenting today Brian Kruger Jeanne Johns Paul Victor Robert Rounsley Braden Lusk Greg Hayne Chairman Managing Director & Chief Financial Officer Chief Technology Officer President President Incitec Pivot Limited Chief Executive Officer Incitec Pivot Limited Dyno Nobel Americas Asia Pacific and Inc
Slide 7: Agenda for the day
Agenda for the day 9:30 Welcome and Introduction (5 mins) Geoff McMurray 9:35 Acknowledgement of Country and Zero Harm (10 mins) Hannah Campbell 9:45 Chairman’s address and introduction (10 mins) Brian Kruger (Video) 9:55 The case for change (15 mins) Jeanne Johns 10:10 Business performance update (
Slide 8: Acknowledgement of Country
ACKNOWLEDGEMENT OF COUNTRY “I begin today by acknowledging the Traditional Custodians of the land on which we meet today, the lands of the Gadigal people of the Eora Nation. I pay my respects to their Elders past and present. I extend that respect to Aboriginal and Torres Strait Islander peoples joi
Slide 9: Zero Harm
Zero Harm Hannah Campbell Moranbah Production Manager 88
Slide 10: As I have grown with IPL…
“As I have grown with IPL…I came to realise that good deliverables rely on talented people, and a culture of safety and strong leadership.” 9
Slide 11: Safety Slide
Safety Slide Visible Engaged leaders drive Reliable plant people drive safety underpins a safety performance safe plant performance 10
Slide 12: Chairman's address
Chairman’s address Brian Kruger 11 11
Slide 13: The case for change
The case for change Jeanne Johns 12 12
Slide 14: What you will hear today
What you will hear today Best placed to capture transformational growth… …with customer led innovation… …unlocked through focus and priority allocation Significant growth Developing pathway Two compelling but opportunities for both Separation to to Paris aligned different investment through customer
Slide 15: Focus and prioritise to unlock value
Focus and prioritise to unlock value Our category leading businesses have exciting yet differing ambitions to focus on and deliver Exciting yet differing Be the global leader Be the clear plant nutrition and downstream strategies to win in explosives solutions soil health leader Each business has di
Slide 16: Two category leading businesses
Two category leading businesses Separate from a position of strength Growing premium customer base Reliability addressed WALA set up for success and 1 and on track to deliver supports AN strategy Strengthened sustained benefits positions Technology strategy that wins Momentum is 2 Customer growth, b
Slide 17: Demand is broad and dynamic
Demand is broad and dynamic Attractive megatrends supports strong business outlook Production Strong resource Increasing Copper supply of minerals demand and technology use expected to miss Population set to hit projected to rise security of supply across tier 2 ore demand by 9m/t c.10 billion by 20
Slide 18: Climate change underpinning megatrends
Climate change underpinning megatrends Accelerated ambitions in energy transition and emissions reduction Energy transition Electrification of Biofuel consumption3 GHG emissions profile mineral demand1 transport2 Clean ammonia Litres, billions and opportunity4 USD billions Units, millions consumptio
Slide 19: Nitrogen supply is challenged
Nitrogen supply is challenged IPL assets continue to be a source of reliable and competitive supply 1 High gas costs causing European curtailments Supply constraints Potentialimpacts • Potential for years of supply disruption Impact • Several year wait for high 2 Russian supply currently restricted
Slide 20: Higher nitrogen pricing
Higher nitrogen pricing Higher nitrogen pricing - increasing customer need to drive value through technology Our customers are increasingly focused on technical innovation to drive yield and manage cost Well positioned to deliver leading customer value propositions across high quality global markets
Slide 21: Accelerate technology platform
Accelerate technology platform Take our technology to the next level and drive customer value Continue to invest in Extract more with less impact technology to deliver Improve soil health and sustainability stronger growth at higher margins and Premium emulsions Next generation sustainable fertilise
Slide 22: Significant pool of opportunities requires focus and priority
Significant pool of opportunities requires focus and priority Focus on individual business expansion, innovation and sustainability to deliver enhanced value to shareholders Capitalise on significant growth in Opportunity to play a leading role in underlying resource demand Australia supporting glob
Slide 23: Our recent trading history
Our recent trading history Highlights a disconnect and the need for investor choice IPL, Explosives and Fertiliser Index EV / NTM EBIT multiple last 10 years (x) Highlights the benefit of investor choice with increased standalone transparency and disclosure 30.0x Lack of benefit from multiple expans
Slide 24: Build the future of two leading businesses
Build the future of two leading businesses Our success has been driven by innovation with …current structure puts natural limits on competing priorities limiting deployment… unencumbered allocation and focus … driven by intensifying global and local megatrends Be the clear leader in premium Be the c
Slide 25: FY22 business performance update
FY22 business performance update 24
Slide 26: FY22 business performance update
FY22 business performance update FY22 earnings are benefitting from the favourable commodity cycle, somewhat impacted by certain other events DNA • Continued favourable farming conditions • Above market growth in Q&C and coal, however metals volumes impacted • Working capital unwind tracking to plan
Slide 27: Q&A
Q&A 26
Slide 28: Investment proposition
Investment proposition 27
Slide 29: Separate and enhance value
Separate and enhance value Now is the time to accelerate our investment proposition to maximise value for shareholders Focus and Unencumbered decisions to prioritise investment to help our strategy to further unlock priority allocation value potential Strengthened Resilience 1 positions 2 through th
Slide 30: Who we are
1 Strengthened positions: Who we are Global explosives business with strong competitive advantages set up for growth Growing presence driven by value proposition Vision to be the best in our markets, delivering Zero Harm and outstanding technology driven #1 and #2 in selective and attractive markets
Slide 31: Paris aligned emissions reduction opportunity
1 Strengthened positions: Paris aligned emissions reduction opportunity Pathway identified with key projects to deliver our ambition1 Scope 1 and 2: Emissions reduction profile GHG emissions reduction opportunity of Clear >40% emissions reduction opportunity >40% by 2030 driven by N2O abatement at M
Slide 32: Security of supply
1 Strengthened positions: Security of supply Integrated supply chain across highest quality markets underpinning significant advantages Meadowbank Flin Flon Ekati Efficient, vertically integrated Diavik ammonium nitrate (AN) Biwabik Ishpeming manufacturing in 2 best markets Titanobel Tumbler Ridge F
Slide 33: Disciplined value creation
2 Resilience through the cycle: Disciplined value creation High margin business creating value through developing customer driven solutions A Price drivers B Cost drivers C Margin Volume Balanced revenue generation across our volume types1 Global AN pricing Services ≠≠≠≠≠≠≠≠≠ dynamics All in cost to
Slide 34: Network asset optimisation
2 Resilience through the cycle: Network asset optimisation Optimising strategic assets to further support our leading downstream explosives business 1 Investments driving reliability and long 2 Strong strategic choices and term earnings potential investment opportunities Dyno Nobel on track to deliv
Slide 35: Managing the nitrogen market
2 Resilience through the cycle: Managing the nitrogen market Leading manufacturing footprint generates optimal margin and cash flow management Optimal Internally sourced AN through the cycle performance Downstream explosives Strong manufacturing margin from global footprint captured, underpinned by
Slide 36: Practical customer led technology
2 Resilience through the cycle: Practical customer led technology End-to-end technical explosives blasting solutions drives strong demand profile through the cycle We deliver solutions across key customer facing categories… Field technicians work closely with our customers Bulk product Automated Saf
Slide 37: End market opportunities
3 Opportunity rich: End market opportunities Strong opportunities to drive earnings growth across our key exposures Revenue opportunity Margin opportunity #1 positions in US and France with Q&C advantages and options to extend leadership Energy transition driving runway of Future facing minerals gro
Slide 38: Technology opportunities
3 Opportunity rich: Technology opportunities Innovation drives customer outcomes and unlocks multiple avenues of growth Under- penetrated Productivity markets Sustainability & safety Technology megatrends unlocks expansion Innovation driving The need for innovation additional growth Dyno Nobel has p
Slide 39: Market opportunities
3 Opportunity rich: Market opportunities Dyno Nobel to make investments to continue to deliver consistent underlying growth North America Australia • Emulsion and partnership expansion to address under-representation • Grow with customers through key project expansions in specific US regions and com
Slide 40: Investment opportunities
3 Opportunity rich: Investment opportunities Pipeline of exciting investment opportunities under evaluation Opportunities Bolt-ons, partnerships or distribution arrangements Australia, North America, South America, Europe and select African and Asian regions Supply chain and manufacturing capability
Slide 41: Innovation driven outcomes
Innovation driven outcomes 40
Slide 42: It starts with innovation
It starts with innovation Technology led increases in productivity, safety and sustainability Optimise efficiency through Automated delivery services technologically driven leading to better and safer use automation of customer workforce Increase blasting accuracy Safe and reliable connectivity Mini
Slide 43: Our approach to technology wins
Our approach to technology wins Next generation technology that drives customer value and wins share Solve customer needs with leading user friendly solutions Deliver customer outcomes through sales and technology collaboration • Collaboration, practical solutions and speed to market derives signifi
Slide 44: Solutions – Underground mining
Solutions – Underground mining Increasingly complex and new methods are required to remove people from danger zones Automated delivery Hot & Reactive systems Ground Emulsions Complex blasting in Safe and reliable Safety of people near Hostile conditions and Customer need stressed underground connect
Slide 45: Solutions – Future facing minerals
Solutions – Future facing minerals Break down operational silos, highlight bottlenecks and simulated blast designs to drive customer decisions Flexibin MPU1 Repeat visits to locate Large variation in Variable fragmentation Customer need holes leads to human blasted rock impacts Inefficient logistics
Slide 46: Solutions – Quarry sustainability
Solutions – Quarry sustainability Quarries often close to communities and our solutions drive successful accuracy and compliance requirements Vibration Management Tools Connectivity across Regulatory and Impact of blast Accurate blasting with blasting requirements community concerns shockwaves on Cu
Slide 47: Digital integrations – data intelligence
Digital integrations – Nobel Fire 1 Blast design 2 Blast execution 3 Blast reporting 4 Blast data mining UCS Import CSV UCS Profiler Cross integration UCS Baiter Delta E2 Desktop and mobile Desktop and mobile EC200, EC300, Dyno Desktop Desktop Logix integration integration Viewshot / 3D / Lite integ
Slide 48: Preparing for the future
Preparing for the future Strong pipeline with divisional collaboration driving the future blasting vision Phase Delivered Development Pipeline Workstream Current Short Term Medium Term Bulk product Emulsions for solutions and Improved storage premium adverse Safer sensitisation quality emulsions min
Slide 49: Americas
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Slide 50: Divisional highlights
Divisional highlights #1 US business with attractive outlook and track record of consistent growth Meadowbank Flin Flon Extensive Ekati #1 US position underpinned by our leading Q&C Diavik footprint and precious metals positions provides Biwabik security of Ishpeming Fermont supply and cost Ormstown
Slide 51: WALA highlights
WALA highlights Significant competitive advantage for growth Provides fuel for growth at 1 leading economics in a tight 1/3 available for downstream growth market Provides strategic flexibility to Flexibility to partner to unlock 2 Dyno Nobel’s strategy growth or capital Location Waggaman, Louisiana
Slide 52: WALA uplift
WALA uplift Strong growth upside from reliable nameplate production WALA operating performance 1H20 to 2H22 Significant investments in 1 reliability and operational Trending towards improved baseline reliability > targeting 95% production reliability standards 97% 72% 70% 83% 82% 81% 51% Reliability
Slide 53: Our customer value proposition
Our customer value proposition Maximising customer returns from mine to market Continued customer wins across RIGHT RIGHT RIGHT REAL precious metals and Q&C ENERGY RIGHT TIMING RIGHT TECHNOLOGY RIGHT REAL RESULTS ENERGY TIMING TECHNOLOGY RESULTS Footprints make us competitive in key North American m
Slide 54: Our growth ambition
Our growth ambition Become a 1 million tonne p.a. ammonium nitrate market leader in the Americas “ Growth targets over medium term: How we win Our longer term ambition is to take our #1 Ammonium nitrate 740kt (2021) to > 1mt Detonators 4 m/u detonators (2021) > 5 m/u US business and grow to be the l
Slide 55: Asia Pacific and Europe
Asia Pacific and Europe 54
Slide 56: Divisional highlights
Divisional highlights Leading business operating in key international locations servicing world’s largest customers Number #1 and #2 in all our key markets; Australia, Indonesia, France and Turkey Strategic footprint provides specific value proposition Business underpinned by our position in world’s
Slide 57: Moranbah
Moranbah World-class facility, foundation for divisional earnings and focal point for decarbonisation Moranbah decarbonisation Highly strategic asset • N20 Abatement expected online in 2024, reducing emissions by Best-in-class performance ~200ktCO2e p.a • Opportunity under evaluation to use waste mi
Slide 58: Our customer value proposition
Our customer value proposition Growing value through application of customer focussed technology Growing value in core market segments Flexible and targeted to the specific Our Eastern Australian proposition • Pre-eminent security of supply position customers and resource regions • Only supplier wit
Slide 59: Our European proposition
Extension of customer value proposition Titanobel is expected to drive meaningful expansion opportunities ✓ Excellent brand equity Our European proposition ✓ End to end product offering and strong distribution footprint ✓ Optimal AN exposure with pass through pricing Titanobel ✓ Leading technology o
Slide 60: Our growth ambition
Our growth ambition To be a leader in all of our key markets Growth ambitions over medium term: • Grow share in new markets “ Our ambition is to be the #1, “ or strong #2 business in every market How we win • Apply technology to grow value for both customers and we choose to enter shareholders • Deb
Slide 61: Financial framework, priorities and targets
Financial framework, priorities and targets 60
Slide 62: Be the clear leader in premium explosives solutions
Be the clear leader in premium explosives solutions in selective global markets Technology led global Clear pathway to transform Competitive and competitive business our business stable returns Follow a disciplined capital allocation Leading customer centric technology Clear pathway to Paris aligned
Slide 63: Deliver competitive and sustainable returns
Deliver competitive and sustainable returns Transform the business with a disciplined approach to creating long term shareholder value Bring our strategy to life Short to medium term Medium to long term • Business strategically positioned post • Continue strategic growth momentum demerger WHAT? • Fo
Slide 64: Capital allocation framework
Capital allocation framework Capital allocation priorities – “How we allocate”1 A$120m – 150m p.a. and deliver 95% asset reliability 1 Sustenance capital Ensure safe, reliable operations Turnaround capital will be additional in the relevant year of planned execution CAPITAL SPEND Deliver Paris align
Slide 65: Transform the portfolio sustainably and competitively
Transform the portfolio sustainably and competitively Driving underlying ROIC Current Future A c.9% FY21A FY21A Target Dyno Nobel Explosives returns on new Group ROIC(1) ROIC (2) invested capital = WACC x 1.3 • Deliver asset improvement plans and secure feedstock • Sustenance allocated first to ensu
Slide 66: Deliver competitive earnings growth
Deliver competitive earnings growth Earnings trajectory progressively less exposed to commodity cycles Manufacturing Downstream Business1 Combined earnings profile1,2 Strategy to deliver mid to high Target Manufacturing facilities producing Track record of growth and capital single digit earnings gr
Slide 67: Becoming the leading player in explosives
Becoming the leading player in explosives Our strategic scorecard underpins our underlying investment case Earnings Targeted leverage Targeting to deliver mid to high single digit earnings growth Target conservative net debt to EBITDA (1.0x – 1.5x) through the cycle and maintain investment credit gr
Slide 68: Why invest in Dyno Nobel?
Why invest in Dyno Nobel? Leading explosives exposure in an attractive industry with deep and experienced management team Attractive industry dynamics Dyno Nobel driving value through the cycle Highest quality exposure to explosives with advantages: Underlying stable demand further fuelled by megatr
Slide 69: Dyno Nobel Q&A
DYNO NOBEL Q&A 68
Slide 70: Incitec Pivot Fertilisers
Incitec Pivot Fertilisers 69
Slide 71: Introduction
Introduction 70
Slide 72: Structural fertiliser megatrends
Structural fertiliser megatrends Global megatrends underpinning long term fertiliser product and services growth Long term Fundamental long Supply and demand sustainability term drivers imbalance expectations Population: Supply and demand: Climate change: By 2050 there will be an Fertilisers supply
Slide 73: Favourable fertiliser dynamics
Favourable fertiliser dynamics Strong demand and pricing for our key products DAP price (nominal)2 (U$/t) Attractiveness of nitrogen and phosphate markets amplified as 779 supply has moderated and demand continues to be healthy 505 440 Supply impacted be Chinese export restrictions and uncertainty a
Slide 74: Growers need support to achieve ambitions
Growers need support to achieve ambitions Unlock value for agriculture industry through technology driven solutions Australian agriculture production value1,2 Increased expectations from growers and industry challenges: (A$bn) National Farmers Federation Strong industry growth ambitions ambition Dem
Slide 75: Enhancing value through execution
Enhancing value through execution Focus on opportunity rich landscape to transform our profitability over the longer term Network optimisation: Physical and digital Deliver a transformation to our profitability network upgrade to further capture customer and through the cycle earnings profile led by
Slide 76: Separate and enhance value
Separate and enhance value Now is the opportune time to accelerate our ambitions to maximise value for shareholders Focus and Unencumbered investment decisions will help our strategy to unlock an priority allocation increased contribution from higher quality earnings Strengthened Resilience 1 positi
Slide 77: Investment proposition
Investment proposition | 76
Slide 78: Who we are
1 Strengthened positions: Who we are Australasia’s leading fertiliser business with significant opportunities in our future Integrated model with scale underpinning #1 Vision to be the best soil health provider in our position in Australian East Coast market markets, delivering Zero Harm and outstan
Slide 79: Paris aligned emissions reduction opportunity
1 Strengthened positions: Paris aligned emissions reduction opportunity Several key projects identified to deliver our ambition1 IPF Scope 1 and 2: Emissions reduction profile GHG emissions reduction opportunity of 44% by 2030 – underpinned by green ammonia potential at Gibson Island External verifi
Slide 80: Disciplined value creation
1 Strengthened positions: Disciplined value creation Integrated and diversified offering to deliver value add and customer outcomes Margin Volume Key contributors to margin Key volume characteristics Distribution Historically resilient + Australian and soil International Diversified exposures megatr
Slide 81: Security of supply
1 Strengthened positions: Security of supply Platform developed over generations delivers scale and presence both locally and across international markets Export Large scale local manufacturer globally Export Supply globally Cairns Australia Largest East Coast importer Perdaman1 Mount Isa Townsville
Slide 82: Significant operational upgrade
2 Resilience through the cycle: Significant operational upgrade Substantial recent asset upgrade program driving growth, competitiveness and reliability Manufacturing Distribution Incitec Pivot Fertilisers on track to deliver Manufacturing Excellence target by FY231 – Network capacity and capability
Slide 83: How we operate in the fertiliser market
2 Resilience through the cycle: How we operate in the fertiliser market Optimal margin and cash flow management IPF operates a cost competitive local Internally sourced fertilisers manufacturing footprint resulting in optimised supply performance Delivering attractive margins Downstream fertilisers
Slide 84: Invest to grow through the cycle
3 Opportunity rich: Invest to grow through the cycle Outsized ‘super cycle’ profits from Manufacturing with strong growth potential from Distribution Opportunities Invest to grow share from existing platform Additional bulk blend, coatings and liquids capacity; state-of-the-art upgrade to PDC networ
Slide 85: Significant soil health opportunity
3 Opportunity rich: Significant soil health opportunity Innovative opportunities identified and prioritised with investment plans in place to implement Soil health EBIT contribution potential in Distribution Higher margin differentiated opportunities Significant opportunity Liquid Fertilisers identi
Slide 86: Perdaman: Long term local supply benefits
3 Opportunity rich: Perdaman: Long term local supply benefits Potential partnership opportunity to deliver step change in Distribution EBIT by 20271 Urea represents >40% of Australian fertiliser and >30% of the Significant benefits to IPF global fertiliser market ✓ Secure competitive large scale loc
Slide 87: Strong Manufacturing
Strong Manufacturing 86
Slide 88: Strategic long term assets
Strategic long term assets Australia’s only large phosphate fertiliser manufacturer – supporting global food security Extensive rock resource, storage and transport Phosphate Hill and Mt Isa operations infrastructure, with access to cost competitive inputs providing privileged position • Produces MA
Slide 89: Cost competitive assets
Cost competitive assets Phosphate Hill is a critical asset delivering significant earnings and cashflow Current global DAP cost curve positioning driven by Phosphate Hill importance to sustainable fertiliser supply access to competitive gas, sulphur and phosphate1 in Australia (US$/t, 1H 2022) Globa
Slide 90: Critical resource region
Critical resource region Phosphate Hill and Mt Isa operations represent critical long term infrastructure in an important region Darwin North Queensland region is rich in minerals and IPL manufacturing plants Export resources critical to the energy transition and Key support facilities globally food
Slide 91: Green ammonia potential
Green ammonia potential Opportunity to develop unique green ammonia partnership with Fortescue Future Industries (FFI) Seek to develop Australia’s first green energy hub with FFI Targeting 300kt tonnes of green ammonia p.a. in IPF Progressing towards FEED with FID targeted for 2H23 Large scale hydro
Slide 92: Leading Distribution Network
Leading Distribution Network 91
Slide 93: Leading go-to-market approach
Leading go-to-market approach Strategic network and leading experience providing unparalleled fertiliser distribution capabilities How we go to market: Unrivalled market presence through scale, port import locations, blending capability and supply Urea Bulk products DAP / MAP SSP1 Extensive network
Slide 94: Long term volume performance
Long term volume performance Resilient profile generated by our model which is diversified across all key elements Further opportunity for growth as market leader Total distributed volumes through time1 Diversified product Diversified end markets: portfolio: Product range Operate at scale in all cor
Slide 95: Strong customer value proposition
Strong customer value proposition Leading supplier of plant nutrition and services with developing digital capability I do 99% of business through IPF. They're easy to work with we have a good Assets and supply chain: relationship with IPF for many years. The product quality is fantastic and the 1 S
Slide 96: Import facility and network upgrade
Import facility and network upgrade Upgrade and convert Gibson Island to provide a strong base to support our Distribution growth ambitions Distribution capability expansion Upgrade and conversion to import model from 2023 Closure of manufacturing by Dec 22 Redevelop site with novel distribution des
Slide 97: Soil health innovation
Soil health innovation 96
Slide 98: Innovation driven growth potential for Distribution
Innovation driven growth potential for Distribution Australian growers are seeking sustainability focused innovation and IPF is strongly positioned to assist Current market trends IPF well placed National drive to improve soil Well recognised brand of innovative fertilisers health and minimise and s
Slide 99: Our soil health strategy and ambitions
Our soil health strategy and ambitions Holistic approach to plant nutrition underpinned by sustainability and digitisation Soil health initiatives underpinned by our 1. leading customer value proposition and “Use only network what’s needed” 4. 2. Differentiated soil health offering utilised to “Use
Slide 100: Nutrient Advantage
1 Use only what’s needed: Nutrient Advantage Soil health starts with building a strong base of soil, crop and nutrient interface knowledge Market opportunity: Strong runway of volume growth Determine the specific nutrient requirement • c.50% of agronomy advisors are Nutrient Advantage • IPF operates
Slide 101: Partnering with Precision Agriculture
2 Use it where it is needed: Partnering with Precision Agriculture The future of large scale variable rate fertiliser application Determine quantity and location of nutrient applications Market opportunity: • Utilises spatial technology to deliver variable rate fertiliser application • Only large sc
Slide 102: Liquid Fertilisers
3 Use it efficiently: Liquid Fertilisers Well positioned to capitalise on the opportunity to develop liquids market on Australia’s East Coast Deliver nutrients quickly, efficiently and sustainably Market opportunity: Australian East Coast market underpenetrated with • Liquid fertilisers are proven i
Slide 103: Liquid Fertilisers – Yara Nipro
3 Use it efficiently: Liquid Fertilisers – Yara Nipro Significant acceleration in momentum and platform to continue to grow strongly IPF reached agreement to acquire Australian liquid fertiliser business Yara Nipro from Yara Australia for A$20 million. Acquisition is subject to ACCC clearance Cairns
Slide 104: Australian Bio-Fertilisers
3 Use it efficiently: Australian Bio-Fertilisers Creating a new more sustainable category of fertilisers from waste, carbon and mineral fertilisers Deliver plant nutrients quickly, efficiently and sustainably Opportunity for additional facilities for QLD, • Combining organic waste material with carb
Slide 105: Enhanced Efficiency Fertilisers
4 Use it don’t lose it: Enhanced Efficiency Fertilisers Next generation fertilisers improving nutrient use efficiency and minimising environmental impact Minimise nutrient losses and GHG emissions – maximise yield • Range covers nitrogen inhibitor coatings, blended and other value add features impro
Slide 106: Expand further into attractive crop segments
Expand further into attractive crop segments Leverage our existing network and positions to drive increased sales of differentiated products Primary Distribution Centres Regional Supply Centres Regional offices Targeting growth in each segment and driving shift in Soil testing laboratory product mix
Slide 107: Financial framework, priorities and targets
Financial framework, priorities and targets 106
Slide 108: Be the clear plant nutrition and soil health leader
Be the clear plant nutrition and soil health leader Strong Manufacturing and Clear pathway to soil health Resilient returns through the Distribution platform and sustainability cycle Cost competitive Phosphate Hill providing resilient cashflow Upgrade network to support next Investments underpinned
Slide 109: Deliver resilient and sustainable returns over time
Deliver resilient and sustainable returns over time Transform the business with a disciplined approach to creating long term shareholder value Bring our strategy to life Short to medium term Medium to long term • Accelerate Distribution momentum • Deliver Distribution transformation • ROIC improveme
Slide 110: Capital allocation framework
Capital allocation framework Capital allocation priorities1 Asset upgrade program 1 Sustenance capital Ensure safe, reliable operations A$60 – $70 million p.a. (excl. turnaround)2 Investment in Gibson Island Continued annual spend to focus on developing site transformation Develop pathway for Paris
Slide 111: Targeting underlying increases to ROIC
Deliver competitive returns whilst transforming the portfolio IPF Group ROIC profile through time Targeting underlying increases to ROIC • Competitive Manufacturing ROIC through the cycle Higher returns • Discretionary capital reinvested to deliver sustainable if DAP price earnings growth remains >
Slide 112: Transforming our earnings profile
Transforming our earnings profile Leverage leading Australian position to transform to innovative soil health solutions business Manufacturing support Target Distribution earnings Distribution ambition contribution2 • Manufacturing producing attractive cashflow at current pricing and Strategy to mor
Slide 113: IPF to transform into soil health focused business
IPF to transform into soil health focused business with a compelling growth profile Earnings resilience Operational longevity Strategy to drive Distribution earnings to >50% of earnings profile Deliver transformational project to support our strategy and enhance earnings quality and predictability O
Slide 114: Why invest in IPF?
Why invest in IPF? Highly attractive pureplay food security exposure set to benefit from various megatrends Attractive industry dynamics IPF positioned to deliver significant value through the cycle Pureplay market leader Food security and local supply are critical Cost competitive local manufacturi
Slide 115: Incitec Pivot Fertilisers Q&A
Incitec Pivot Fertilisers Q&A 114
Slide 116: Separation
Separation Paul Victor 115 115
Slide 117: Separations deliver value
Separations deliver value… Separations tend to deliver enhanced shareholder returns over time TREND: Excess returns vs. ASX of ParentCo entity Excess returns vs. ASX of ChildCo entity Most demerged entities achieved post separation1 post separation1 outperformance against the market Outperformance t
Slide 118: Separation benefits
Separation benefits Unlocking shareholder value through sharpened focus on delivery of strategic objectives CAPITAL • Optimisation of capital structures to different business profiles yields better returns 1 STRUCTURE • Move to prioritise strategic sources and allocating capital to enable delivery •
Slide 119: Management of costs
Management of costs1 Separation costs initially drag on cashflow One-off costs – Higher level of certainty Significant opportunity for further future synergy benefits to be realised by each business post Range estimate: A$80 – A$105 million1 demerger IT Transition Personnel Costs Regulatory Advisor
Slide 120: Separation implementation steps
Separation implementation steps Key events leading into separation – progress tracking to expectations September – October November December – February March Investor FY22 results Scheme Booklet release Separation day announcement Implementation and roadshow 1 Final Board approval 2022 2 Regulatory
Slide 121: Questions & Answers
| i Incitec Pivot INNOVATION ON THE GROUND Quesriai Ss
Slide 122: Our journey to here
Our journey to here Best placed to capture transformational growth… …with customer led innovation… …unlocked through focus and priority allocation Significant growth Developing pathway Two compelling but opportunities for both Separation to to Paris aligned different investment through customer supp