Orica Limited · ASX:ORI
Orica — Shareholder Meeting (January 2014)
25 slides from Orica's shareholder meeting presentation, Jan 30, 2014
Slide 1: 2013 Annual General Meeting
For personal use only 2013 ANNUAL GENERAL MEETING 30 January 2014 Ian Smith, Managing Director and CEO © Orica Limited Group
Slide 2: Disclaimer
Disclaimer For personal use only Forward looking statements This presentation has been prepared by Orica Limited. The information contained in this presentation is for informational purposes only. The information contained in this presentation is not investment or financial product advice and is not
Slide 3: Agenda
For personal use only Introduction Sustainability Financial Performance Projects Update Business Update 3
Slide 4: Geographic Footprint
Geographic Footprint For personal use only ~14,500 Employees Operations in 50 countries Customers in over 100 countries 4
Slide 5: Commodity Diversity
Commodity Diversity For personal use only FY13 Mining Services Revenue by Commodity 13% • 92% of EBIT is mining related Thermal Coal 29% Coking Coal 14% Gold • Broad mining exposure Iron ore Copper 6% 12% Q&C • Wide geographic spread Others 6% 19% 5
Slide 6: Agenda
For personal use only Introduction Sustainability Financial Performance Projects Update Business Update 6
Slide 7: Safety Performance
Safety Performance For personal use only 0.9 5 0.8 4.5 4 0.7 3.5 Injury Frequency Rate 0.6 Severity Index 3 0.5 2.5 0.4 2 0.3 1.5 0.2 1 0.1 0.5 0 0 2010 2011 2012 2013 LWCR Severity Index AWRCR 2013 AWRCR including Ground Support 1. AWRCR: All Worker Recordable Case Rate, total number of recordable
Slide 8: Greenhouse Gas
Greenhouse Gas For personal use only • The net cost of the Australian carbon tax to Orica is immaterial. • Abatement technology has reduced annual carbon emissions by more than 750,000 tonnes at a total capital cost of ~ A$9M. • The future direction of carbon tax legislation remains unclear followin
Slide 9: Botany Mercury Remediation
Botany Mercury Remediation For personal use only • Remediation work at Botany includes excavation of contaminated soils and the construction of a vapour cap and barrier walls to contain any residual soil mercury contamination. • The work is expected to take 2 years. • Testing indicates there are no
Slide 10: Licence To Operate
Licence To Operate For personal use only Kooragang Island and Yarwun Sustaining and Maintenance Capital1 $m 160 Significant improvement in SHEC performance at 140 major manufacturing plants: 120 100 80 60 40 − ammonia plant upgrade & risk reduction 20 0 − upgrade of computerised instrumentation 2011
Slide 11: Agenda
For personal use only Introduction Sustainability Financial Performance Projects Update Business Update 11
Slide 12: Group Financial Performance
Group Financial Performance For personal use only Full year ended 30 September (A$M) 2013 2012 % EBITDA1 1,269.2 1,274.0 0 EBIT2 984.8 1,022.6 (4) Statutory profit after tax3 601.6 402.8 49 Underlying profit after tax4 601.6 650.2 (7) Net operating cash flow 1,058.7 544.1 95 1. Earnings be
Slide 13: Group EBIT
Group EBIT For personal use only A$M 1,200 1,150 36 (33) 90 (21) (29) 1,100 (33) (23) 1,050 1,023 (35) 10 985 1,000 950 900 850 800 2012 EBIT KI Shutdown Volume Price/Mix - Price/Mix - Ground Depreciation / Land Sales FX Other Costs 2013 EBIT Explosives Other Product Support Amortisation Groups Opti
Slide 14: Investing Activities
Investing Activities For personal use only Capital Expenditure1 / Acquisitions Actual 2013 Budget 2014 Sustaining 243 211 Customer Facing Contract Capital2 116 121 Growth3 217 95 Burrup4, 5 200 162 Total 776 589 Lower capital expenditure forecast in FY14 1. Excludes capitalised interest. 2. Capital
Slide 15: Agenda
For personal use only Introduction Sustainability Financial Performance Projects Update Business Update 15
Slide 16: Mineral Carbonation
Mineral Carbonation For personal use only • Carbon capture technology that permanently stores CO2 by reacting it with mineral silicates. • Orica is a partner in Mineral Carbonation International (MCi) with The University of Newcastle and GreenMag which aims to build a pilot plant. Testing/Piloting o
Slide 17: Bontang Ammonium Nitrate Plant
Bontang Ammonium Nitrate Plant For personal use only kt AN Production 300 • AN plant with capacity of ~ 300 ktpa 250 200 Annualised located at Bontang, Indonesia. 150 100 50 0 Actual Actual Actual • Name plate capacity achieved with H2 2012 H1 2013 H2 2013 product quality within specification. • Dur
Slide 18: HONCE Initiating Systems
HONCE Initiating Systems For personal use only • Plant capacity 40 million non- electric detonators • Commissioning will occur progressively over the next 12 months • Licence approval process underway 18
Slide 19: Burrup Ammonium Nitrate Project
Burrup Ammonium Nitrate Project For personal use only • 330ktpa capacity AN plant on the Burrup Peninsula, Western Australia, in joint venture with Yara & Apache (Orica : 45%). • Unique project and capital structure − $110M entry fee − 45% of project capital − 100% marketing rights for all AN • Prov
Slide 20: Kooragang Island Capacity
Kooragang Island Capacity For personal use only Rationale Concept • Ammonium Nitrate (AN) demand in SE • increase AN production to 500ktpa by Australia exceeds production. investing in nitric acid import storage. • project cost approximately $40 million • during 2015 the AN shortfall exceeds • proje
Slide 21: Gas Agreement with ESSO / BHPB
Gas Agreement with ESSO / BHPB For personal use only • 3 year deal for KI’s gas from 2017-2019 – 14PJ per annum – pathway to extend for a further 3 years • Gas from Gippsland basin via ExxonMobil’s Longford processing plant Cost Implications – Strike unsuccessful: cost increases of ~ $12mpa compared
Slide 22: Agenda
For personal use only Introduction Sustainability Financial Performance Projects Update Business Update 22
Slide 23: Integration of Ground Support
Integration of Ground Support For personal use only 2013 2014 Integration of ground support into Ongoing beneficial effects from Mining Services complete optimisation & integration one off costs of $29 million incurred 2014 Financial Year $23 - $25M 23
Slide 24: Explosives
Explosives For personal use only Volumes: 2013 Volumes were slightly down across most markets offset partly by the expansion of our contract base. Price: Current market conditions have limited our ability to lift the pricing of Ammonium Nitrate outside of North America. Market Share: Extension of ou
Slide 25: Delivery of Strategy
Delivery of Strategy For personal use only Leverage • Removal of functional duplication New Operating • Cost control and efficiencies Model • Supply chain and manufacturing excellence Disciplined • Capital light approach to manufacturing Capital • Disciplined approach to project management Allocatio