Orica Limited · ASX:ORI
Orica — Credit Suisse Asian Investment Conference 2014
27 slides from Orica's conference presentation, Mar 25, 2014
Slide 1: Credit Suisse Asian Investment Conference
For personal use only Credit Suisse Asian Investment Conference Hong Kong 25th – 27th March 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: Introduction, Sustainability, Projects Update, Business Update
For personal use only Introduction 3-7 Sustainability 8 - 11 Projects Update 12 - 16 ► Business Update 17 - 24 3
Slide 4: What We Are
What We Are For personal use only 1. World’s largest provider of commercial explosives to mining and infrastructure markets with ~ 28% global market share. 2. Largest supplier of chemical products to mining, water treatment and other industrial, food and cosmetics markets in Australia and New Zealan
Slide 5: Where We Are
Where We Are For personal use only ~14,500 Employees Orica Coverage Operations in 50 countries Customers in over 100 countries 5
Slide 6: Geographic & Commodity Diversity
Geographic & Commodity Diversity For personal use only • 92% of Group EBIT is generated from • Commodity and geographic diversity mining related industries including reduces earnings volatility. quarrying and construction FY13 Mining Services Revenue 13% 5% 11% Africa and CIS Thermal Coal 29% Coking
Slide 7: Delivery of Strategy
Delivery of Strategy For personal use only Leverage New • Removal of functional duplication Operating • Cost control and efficiencies Model • Supply chain and manufacturing excellence Disciplined • Capital light approach to manufacturing Capital • Disciplined approach to project management Allocatio
Slide 8: Introduction, Sustainability, Projects Update, Business Update
For personal use only Introduction 3-7 Sustainability 8 - 11 Projects Update 12 - 16 ► Business Update 17 - 24 8
Slide 9: Safety Performance
Safety Performance For personal use only 2013 Total Recordable Injury Frequency Rate Data (per million hours worked, excludes December Y/E companies) WorleyParsons Ltd 0.1 Perseus Mining Ltd 1.5 Nufarm Limited 2.2 Orica Ltd 2.7 YTD is 2.0 (as at end February 2014) Transurban Group 3.5 Amcor Ltd 3.5
Slide 10: Greenhouse Gas
Greenhouse Gas For personal use only • The net cost of the Australian carbon tax to Orica is immaterial: − the cost of direct emissions is mostly offset through free permits allowed for EITE (Emissions Intensive Trade Exposed) activities − installment of abatement at most nitric acid plants in Austr
Slide 11: 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 further develop carbon capture technolo
Slide 12: Introduction, Sustainability, Projects Update, Business Update
For personal use only Introduction 3-7 Sustainability 8 - 11 Projects Update 12 - 16 ► Business Update 17 - 24 12
Slide 13: 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 and Apache (Orica share: 45%). • Unique project and capital structure − $110M entry fee − 45% of project capital − 100% marketing rights for all AN
Slide 14: Kooragang Island Capacity
Kooragang Island Capacity For personal use only Rationale Concept • Ammonium Nitrate (AN) demand in South East • Increase AN production to 500ktpa by investing Australia exceeds production from Kooragang in nitric acid import storage. Island. • Project cost approximately $40 million • During 2015 th
Slide 15: Bontang Ammonium Nitrate Plant
Bontang Ammonium Nitrate Plant For personal use only kt AN Production 300 • AN plant with capacity of ~ 300 ktpa located at 250 Bontang, Indonesia. 200 Annualised 150 • The plant is currently operating at name plate 100 capacity on an annualised basis and product 50 0 quality is within specification
Slide 16: HONCE Initiating Systems
HONCE Initiating Systems For personal use only • Plant capacity 40 million non- electric detonators • Operational commissioning is on schedule with production commenced for some components • Licence approval process underway 16
Slide 17: Introduction, Sustainability, Projects Update, Business Update
For personal use only Introduction 3-7 Sustainability 8 - 11 Projects Update 12 - 16 ► Business Update 17 - 24 17
Slide 18: North American AN Agreement
North American AN Agreement For personal use only • Entered 10 year agreement with CF Industries Inc to supply up to 800,000 tonnes for North American operations – Commencing in January 2017 with an option for Orica to extend for further 5 years until end 2031 • AN sourced from Yazoo city facility i
Slide 19: Gas Agreement with ESSO / BHPB
Gas Agreement with ESSO / BHPB For personal use only • Entered 3 year deal with Esso Australia and BHP Billiton to supply KI’s total gas requirement from 1 January 2017 to 31 December 2019 – 14PJ per annum (total supply of 42PJ) – pathway to extend for a further 3 years • Gas sourced from Gippsland
Slide 20: Strike Energy
Strike Energy For personal use only • Agreement with Strike to develop a highly prospective gas resource – Orica is the only foundation customer – Initial agreement - 20 year supply agreement for up to 150PJ – Additional agreement – an extra 100PJ over 10 years – Strengthens Orica’s east coast gas p
Slide 21: East Coast Australia Gas Supply
East Coast Australia Gas Supply For personal use only • Orica’s forward-looking Australian east coast gas supply strategy now provides for natural gas supply at competitive pricing until 2029 • Annual gas requirements for east coast from 2014 – 2016 are covered by current agreements • The total annu
Slide 22: Chemicals
Chemicals For personal use only Represents ~ 8% of Group EBIT ($92 million) • operates in Australasia, Latin America and Asia FY13 Chemicals Revenue • diverse range of markets Manufactured • strategic review of business underway Chemicals 20% First half earnings have been impacted by • lower acid vo
Slide 23: Explosives
Explosives For personal use only Change in Explosives Contribution per Tonne1 30 20 FY 2013 versus FY 2012 % movement 10 0 Australia / Pacific North America Latin America EMEA Asia 2 Total -10 -20 -30 -40 -50 H1 2013 H2 2013 FY 2013 Contribution per tonne is better in 2014 YTD than FY 2013 YTD volum
Slide 24: Update
Update For personal use only As flagged in November 2013, market conditions in H1 2014 are proving to be more challenging than what is expected in H2 2014. The profit in H1 2014 is expected to be below H1 2013 due to market demand and weather. No change to guidance (Group net profit after tax before
Slide 25: Supplementary Information
For personal use only Supplementary Information 25
Slide 26: Group Financial Performance
Group Financial Performance For personal use only Full year ended 30 September (A$M) 2013 2012 % o EBITDA1 1,269.2 1,274.0 0 EBIT2 984.8 1,022.6 (4) Statutory profit after tax3 601.6 402.8 49 h Underlying profit after tax4 601.6 650.2 (7) Net operating cash flow 1,058.7 544.1 95 h 1. Earnings be
Slide 27: 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
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