Orica Limited · ASX:ORI
Orica — Shareholder Meeting (January 2013)
33 slides from Orica's shareholder meeting presentation, Jan 31, 2013
Slide 1: 2012 Orica Annual General Meeting
For personal use only 2012 ORICA ANNUAL GENERAL MEETING Thursday 31st January 2013 Ian Smith – Managing Director and CEO, Orica Limited
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: Content
Content For personal use only 1. Safety, Environment and Community 2. Financial Results and Minova 3. Vision, Values and Business Model 4. Structure and Strategy 5. Initiatives and Projects 6. Business Environment Slide 2
Slide 4: Safety Performance
Safety Performance For personal use only Orica's historical safety performance 0.7 5 4.5 0.6 4 Injury Frequency Rate 0.5 3.5 Severity Index 0.4 3 0 1 1 2.5 0.3 2 0.2 1.5 1 0.1 0.5 0 0 2010 2011 2012 LTIFR AWRCR Severity Index 1. AWRCR: All Worker Recordable Case Rate, total number of recordable case
Slide 5: Greenhouse Gas Emission Reduction
Greenhouse Gas Emission Reduction For personal use only Abatement • Abatement technology has now been installed on nitric acid plants at Kooragang Island, Yarwun, Bontang and Carseland. This will reduce greenhouse gas emissions equivalent to removing 150,000 cars from the road. Mineral Carbonation •
Slide 6: Orica GreenEDGE Cycling
Orica GreenEDGE Cycling For personal use only Orica GreenEDGE Cycling will compete in more than 300 events with over 200 days of racing per year. This exposure provides excellent branding while providing opportunities for interaction with our communities, customers and suppliers. Slide 5
Slide 7: Project Sustain
Project Sustain For personal use only Environment Health and Community Hygiene Safety Project Risk Sustain SHEC and Risk Social Industry Leader Responsibility Equipping Orica to be a socially responsible company through being a global innovator & leader in Safety, Health, Environment, Community & Ri
Slide 8: Content
Content For personal use only 1. Safety, Environment and Community 2. Financial Results and Minova 3. Vision, Values and Business Model 4. Structure and Strategy 5. Initiatives and Projects 6. Business Environment Slide 7
Slide 9: Group Financial Performance
Group Financial Performance For personal use only Full year ended 30 September (A$M) 2012 2011 % Statutory profit after tax 402.8 642.3 (37.3) Individually material items 247.4 - Underlying profit after tax 1 650.2 642.3 1.2 2012 underlying net profit in line with guidance3 Earnings per share (
Slide 10: Minova Asset Impairment
Minova Asset Impairment For personal use only Full year ended 30 September (A$M) 2012 Individually material items 247.4 Comprising North America 307.2 China 20.0 Minova Group 40.0 Total Pre Tax 367.2 Tax Effect (119.8) Total After Tax 247.4 Slide 9
Slide 11: Minova to Optimova
Minova to Optimova For personal use only The Minova business :- • Provides a pathway to growth through bundling of solutions to underground customers (a market that currently constitutes less than 15% of Mining Services revenue); • Good Cash Conversion at around 96%; but • Needs to be repositioned f
Slide 12: Content
Content For personal use only 1. Safety, Environment and Community 2. Financial Results and Minova 3. Vision, Values and Business Model 4. Structure and Strategy 5. Initiatives and Projects 6. Business Environment Slide 11
Slide 13: Vision and Values
Vision and Values For personal use only Clever Resourceful Solutions Clever adjective skilful; talented; adroit; ingenious; quick to understand & learn Resourceful adjective full of resource; ingenious; skilful in overcoming difficulties No Accidents Today Succeed Through Collaboration Find Valuable
Slide 14: Business Model
Business Model For personal use only Global leader in the provision of high Customers service, critical consumables to the mining & Marketing & infrastructure markets Differentiated customer, product, service & solution offerings Sales & Service Low cost manufacturing & supply Manufacturing & Supply
Slide 15: Business Model: The Power of Partnership
Business Model For personal use only The Power of Partnership Best Partner Best Sustainable Orica Stakeholder Relationships Profits Best Supply Strategic Outcomes Strategic Relationships Strategic Alliances Continual product development Long term presence Innovative creative improvement Applied prod
Slide 16: Content
Content For personal use only 1. Safety, Environment and Community 2. Financial Results and Minova 3. Vision, Values and Business Model 4. Structure and Strategy 5. Initiatives and Projects 6. Business Environment Slide 15
Slide 17: Structure
Structure For personal use only Ian Smith Chief Executive Officer Noel Meehan Andrew Larke Chief Financial Officer Global Head Strategy & Planning Trisha McEwan Craig Elkington Global Head Human Resources Global Head Mining Services Gavin Jackman Ron Douglas Global Head Corporate Affairs Global Head
Slide 18: Strategy
Strategy For personal use only 1 Provision of differentiated products, services and solutions STRATEGIC DIRECTION which enhance value for customers across the globe CORPORATE supported by . . . 2 Reliable low-cost multi- 3 4 Development and Capital efficient JVs or source supply chains commercialisa
Slide 19: Strategy: Strategic Imperatives
Strategy For personal use only Strategic Imperatives Differentiated Differentiated Refine the customer value proposition services led model Develop people capability & competence Stabilise the capital spending program Drive common systems and processes Focus on performance metrics & targets Renew ma
Slide 20: Strategy: Old and New Strategic Nuance
Strategy For personal use only Old Strategic Nuance New Strategic Nuance 1. Internal focus 1. External relationship focus – customers, suppliers & governments 2. Business unit primacy 2. Strong functional accountability 3. Product innovation 3. Customer driven solutions and services – break-through
Slide 21: Content
Content For personal use only 1. Safety, Environment and Community 2. Financial Results and Minova 3. Vision, Values and Business Model 4. Structure and Strategy 5. Initiatives and Projects 6. Business Environment Slide 20
Slide 22: Orica's Ability to Build Margin
Orica’s Ability to Build Margin For personal use only Structure Complete The new structure; with centralised functional support/services that assist the value chain steps of Research and Development, Manufacturing and Mining Services and Chemicals; will enable Orica to grow without the need to dupli
Slide 23: Security of Supply
Security of Supply For personal use only Over 50% of our mining related EBIT is generated within the area shown in the adjacent map. Security and flexibility of supply is supported by:- 1. four large AN prill plants (post Burrup) 2. numerous emulsion plants 3. extensive storage capacity & locations
Slide 24: Manufacturing Excellence
Manufacturing Excellence For personal use only A deep dive has been performed into Kooragang Island operations • Operational and process improvements identified for the next 12 months • Plant improvements implemented to reduce the risk of major incidents Results already achieved include: • All maint
Slide 25: Contracts Profile in FY12
Contracts Profile in FY12 For personal use only ACCOUNTS WON AND LOST AT TENDER October 2011 to July 2012 January 2012 to December 2012 17% 13% 27% 43% 40% Lost 35% 83% 87% 73% 57% 60% Won 65% Existing Competitor held Greenfield Existing Competitor held Greenfield customer customer 24Slide 24
Slide 26: Kooragang Island Expansion
Kooragang Island Expansion For personal use only • Project feasibility work is complete and all statutory planning approvals have been obtained • An engineering pathway for construction has been confirmed and a detailed technical appraisal has been presented to the Board • Most long lead items have
Slide 27: Burrup JV
Burrup JV For personal use only • NW Iron Ore = geographic & commodity diversification Announced Iron Ore Production Increases • Site preparation activity commenced in October North West Regions (mtpa) 2012 900 • Unique project & capital structure that reduces 15% CAGR 800 capital risk:- 700 • $110M
Slide 28: Content
Content For personal use only 1. Safety, Environment and Community 2. Financial Results and Minova 3. Vision, Values and Business Model 4. Structure and Strategy 5. Initiatives and Projects 6. Business Environment Slide 27
Slide 29: Longer Term Demand Cycle
Longer Term Demand Cycle For personal use only Growth in Global Commodity Demand: 2010 - 2030 Nickel Copper Aluminium Zinc Lead Iron ore Coal 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Change in global demand, 2010 - 2030 Source: ABARES, Deloitte Access Economics – Commissioned by Minerals Council of Au
Slide 30: Economic Resources are Widespread
Economic Resources are Widespread For personal use only Australia’s share of resources Global Total Share of total; Total EDR1 Coal (black) 6% 94% 681Gt Copper 13% 87% 603Mt Gold 13% 87% 49kt Iron Ore 15% 85% 158Gt Bauxite 23% 77% 27Gt Nickel 38% 62% 70Mt Uranium 38% 62% 3047kt Australia Rest of Wor
Slide 31: Attractive Industry Fundamentals
Attractive Industry Fundamentals For personal use only Growth in Australia (1982 – 2011) 1,400 1,200 Ammonium Nitrate Demand 1,000 CAGR 9.0% Index (1982 = 100) 800 Iron Ore & Minerals Prod. 600 CAGR 5.8% 400 Coal Production 200 CAGR 4.4% 0 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004
Slide 32: Attractive Industry Fundamentals
Attractive Industry Fundamentals For personal use only Gold Production and Ore Grades Cyanide Demand 120 1.8 180 Gold Production (Index: 160 100 1.7 140 80 1.6 120 2006=100) 100 60 1.5 80 40 1.4 60 40 20 1.3 20 0 1.2 0 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 Global Gold Productio
Slide 33: Unique Profile and Opportunities
Unique Profile and Opportunities For personal use only Profile • Global market leadership • Strong manufacturing position • Attractive industry fundamentals • Multiple growth opportunities • Ground breaking technology Opportunities • Growth in commodity volumes, driven by industrialisation and urban