Slide 1: Incitec Pivot Limited
Incitec Pivot Limited ABN 42 004 080 264 ASX Code: IPL OTC: INCZY 1
Slide 2: Disclaimer – Summary Information
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
Slide 3: Disclaimer – Forward Looking Statements
Disclaimer FORWARD LOOKING STATEMENTS • This presentation 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 acknowledge the First Peoples of the land, sea and waters across the various locations that we are living and working from today. I pay my respects to Elders past and present. 4
Slide 5: Overview
Mauro Neves Chief Executive Officer & Managing Director Overview 5
Slide 6: Key Messages
Key Messages Strategy progressing on track Our ambition • Our markets are resilient and the shift to materials and minerals is advantageous for our profitability to become the leading • We are leveraging our unique competitive advantage to drive growth global explosives • We are working to drive pro
Slide 7: FY24 Financial Results
FY24 Financial Results Strong underlying financial performance and progress on Fertilisers separation Safety • Remains the highest priority with leading indicators showing progress Strong underlying • Record earnings for DNAP and Distribution driven by transformation program Group performance and op
Slide 8: Our strategic ambition
Our strategic ambition Ambition Aspiration to become the leading global explosives player doubling earnings1 and delivering ROIC2 above WACC We will deliver this ambition by leveraging our competitive advantage, including: Competitive advantage Proprietary Superior bundled Deep customer Privileged a
Slide 9: Safety: Our #1 priority
Safety Safety: Our #1 priority Process Safety Incidents1 Zero Harm Strategy Trending favourably in line with Get the Strengthen our 2024 18 Simplify Lead and Engage increased focus on operational Fundamentals Right Learning Culture excellence. 2023 14 Zero Tier 1 events in FY24 (PCP: 2). • As previo
Slide 10: Transformation delivers strong underlying earnings growth
Transformation delivers strong underlying earnings growth EBITDA3 EBIT3 • Strong underlying1 earnings growth $925m $580m o DNAP +45%, DNA +15%, Fertilisers Distribution +32% $1,215m in FY23 $880m in FY23 NPAT (excl. IMIs) NPAT (incl. IMIs)4 • Transformation program delivers $64m EBIT benefit • Explo
Slide 11: Transformation program on track
Transformation program on track Ambition to double FY23 Dyno Nobel EBIT in 3-4 years1 FY24 EBIT delivery ahead of expectations Timing Estimated EBIT delivery1 $64m of EBIT uplift achieved in FY24 (21% of overall program) FY24 ~A$64m actual FY25 ~40-50% exit run rate COMMERCIAL ~70% of benefit DNAP r
Slide 12: Transformation program
Transformation program A clear plan to deliver our ambition via targeted levers FY25 outlook ~40% of EBIT benefit FY25 outlook ~40% of EBIT benefit FY25 outlook ~20% of EBIT benefit Operational levers Commercial levers Growth levers ~45% to 55% of EBIT benefit2 ~25% to 35% of EBIT benefit2 ~15% to 2
Slide 13: Technology
Technology Innovation continues to drive customer value and earnings growth Technology driving growth Premium Emulsions • Leading technology delivers enhanced margins and customer growth FY20 to FY24 CAGR o $11m of earnings growth directly from technology uptake Volume Revenue +16% +28% o Deployed 1
Slide 14: Operational excellence
Operational excellence Focus on reliability improvement yielding positive returns Global Performance Update Fertilisers - Phosphate Hill Taskforce • Cheyenne: 14% reliability improvement in FY24 post FY23 • Taskforce approach delivers operational improvements turnaround • 480kmt production in 2H FY2
Slide 15: Dyno Nobel – Explosives Combined business
Dyno Nobel Record Asia Pacific result with continued Americas metals growth EBIT (A$M) FY24 FY23 Chg. • Record result driven by positive customer recontracting Combined business Dyno Nobel Asia Pacific 257 188 36% • Strong electronics earnings growth • Moranbah AN production lower on loss of GI ammo
Slide 16: Fertilisers Asia Pacific
Fertilisers Asia Pacific Record Distribution performance; significant improvement 2H manufacturing reliability EBIT (A$M) FY24 FY23 Chg. • Record Distribution EBIT1 driven by improved volumes and margins, Distribution Distribution 60 46 32% despite lowest average commodity prices since 2021 Manufact
Slide 17: Strategic intent – Our plan to separate Incitec Pivot Fertilisers
Strategic intent – Our plan to separate Incitec Pivot Fertilisers What did we say at the What have we What’s next? Investor Showcase? delivered? • Identified Gibson Island as a key • Identify assets that are not real estate asset to divest Commence sale process for Real Estate contributing and can b
Slide 18: Our Distribution business is the market leading fertiliser provider
Our Distribution business is the market leading fertiliser and services provider on the east coast with significant growth platform Key highlights Key terminals Primary Distribution Centres Regional Service Centres Full-service business with capabilities across soil testing, marketing, ü Regional of
Slide 19: Sustainability and Decarbonisation
Sustainability and Decarbonisation Key progress on our transition pathway • 7% – Moranbah Tertiary N2O Abatement1 – opened 8 March 2024 • 19% – LOMO Tertiary N2O Abatement1 – approved for installation in 2025 • Onboarding commenced for a global GHG2 management platform, including a Scope 3 GHG2 mana
Slide 20: Group financial results
Paul Victor Chief Financial Officer Group financial results 20
Slide 21: FY24 financial performance in context
• Strong underlying financial performance • Results impacted by portfolio changes and execution of strategy FY24 financial • Impairments mostly reflect uncertain gas environment performance • Underlying working capital improved despite higher input costs in context • Buyback program well progressed
Slide 22: Group Statutory Results
Group Statutory Results Results mainly impacted by portfolio changes; underlying results strong IPL Group ($M) FY24 FY23 Chg. • Headline results reflect major portfolio restructuring Revenue 5,365 6,008 (11%) • Normalised5 earnings up 18% with growth in all customer- facing businesses EBITDA excludi
Slide 23: Normalised Group earnings
Normalised Group earnings Strong underlying performance, transformation program delivers ahead of expectations IPL Group ($M) – Normalised1 FY24 FY23 Chg. Strong underlying earnings in customer facing businesses Dyno Nobel Asia Pacific 257 177 45% Dyno Nobel Americas 262 228 15% • Group: EBIT up 18%
Slide 24: Individually Material Items – Impairments
Individually Material Items – Impairments Impairments reflect gas price uncertainty and portfolio changes Impairment charges before tax (A$M) 1H24 2H24 FY24 Australian Fertilisers business Australian Fertilisers 498 443 941 • Distribution: No impairment recorded as significant headroom for assets ex
Slide 25: Working capital
Working capital Further reduction in underlying levels remains a key priority for transformation project Year-on-Year movement ($m) Trade Working Capital as a % of sales1 266 842 23.9 24.6 23.0 20.8 20.7 574 15 23 18.7 19.2 18.5 19.1 (29) (7) Sep 23 Translational Commodities & DNA/Chile Other underl
Slide 26: Investing for growth & quality earnings
Investing for growth & quality earnings Strict investment criteria for all capital investments 86 Strategic Sustenance & Growth 31 • Sustainable ROIC4 mindset when deploying capital 71 57 • Further rollout of capital-light solution Sustainability1 ~$10m 24 Turnaround $120-140m 63 98 (including Moran
Slide 27: Strong balance sheet supports shareholder returns in FY24
Strong balance sheet supports shareholder returns in FY24 Capital return program1 FY24 total ordinary dividends5 ~$203m $1.4 billion 10.6cps Interim & final Completed Ongoing1,2 Unfranked FY24 final dividend5 $302m $198m $149m3 $751m ~$119m 6.3cps Capital Unfranked special Buyback Buyback Announced
Slide 28: FY25 outlook
FY25 outlook Dyno Nobel Fertilisers Earnings outlook supported by: Earnings outlook supported by: DNA Explosives: continued focus on price discipline and cost management Distribution: earnings expected within normal $40m to $60m range, dependent on market conditions DNAP: recontracting benefits cont
Slide 29: Turnaround schedule
Turnaround schedule1 Plant FY25 FY26 FY27 FY28 FY29 FY30 EXPLOSIVES Minor turnaround for nitric acid plant Cheyenne, WY Major turnaround at Moranbah Moranbah, Qld scheduled for ~8 weeks Louisiana, MO FERTILISERS Turnaround subject to Phosphate Hill, Qld outcome of strategic review St Helens, OR Turn
Slide 30: Key Messages
Key Messages Strategy progressing on track • Our markets are resilient and the shift to materials and minerals is advantageous for our profitability • Commitment to delivering Fertilisers separation in 6-12 months as a priority Our ambition • We are leveraging our unique to become competitive advant
Slide 31: Questions & Answers
“ANGI FANG Do <3 Questions & Answers
Slide 32: Appendix
Appendix 32
Slide 33: Distribution financial performance
Distribution financial performance Distribution key financial metrics (reported and excludes IMIs)1 Key commentary Volumes Units FY22 FY23 FY24 • Distribution volumes continue to grow strongly Volumes distributed kt 1,869 2,036 2,169 o Resilient growth through variable commodity, weather and macroec
Slide 34: Group Result
Group Result EBIT A$m Re-basing Customer Facing Manufacturing Other from FY23 Businesses 880 (30) +18% 30 14 12 13 580 80 (50) (9) (338) 490 (22) GI Closure Commodities DNAP Ferts Manufacturing Corporate & & FX Distribution Reliability elims. FY23 WALA Re-based DNA Cost of Gas - Turnaround FY24 FY23
Slide 35: Dyno Nobel Asia Pacific
Dyno Nobel Asia Pacific EBIT A$m +45% Re-basing 3 257 FY23 11 22 (1) 45 188 177 (11) FY23 Moranbah Plant Re-based Recontracting Customer Technology Titanobel Other FY24 (GI closure impact) FY23 35
Slide 36: Dyno Nobel Americas
Dyno Nobel Americas EBIT US$m Re-basing Explosives Ag & IC CF Offtake FY23 16.0 390 (10.0) 4.0 +15% (2.0) Margin Amortisation Transport CF Offtake (non-cash) costs Total 4 8 172 15 8 3 (226) 149 (15) (15) WALA Re-based CF Offtake Turnaround Manufacturing FY23 Reliability / Other FY23 Commodities Gro
Slide 37: Fertilisers Asia Pacific
Fertilisers Asia Pacific EBIT A$m Re-basing Manufacturing Distribution from FY23 30 153 134 (19) 14 120 (58) FY23 GI Closure Re-based Cost of Gas - Manufacturing Distribution FY24 FY23 Phos Hill Reliability 37