Dyno Nobel Limited · ASX:DNL
Dyno Nobel — Investor Day (August 2020)
46 slides from Dyno Nobel's investor day presentation, Aug 4, 2020
Slide 1: Investor Briefing Presentation
ASX RELEASE Investor Briefing Presentation 4 August 2020 Incitec Pivot Limited (ASX:IPL) will host a virtual Investor Briefing commencing at 10.00am (AEST) on Tuesday, 4 August 2020, at which the following presentation will be given. Links to register for the Investor Briefing are provided below, an
Slide 2: Investor Briefing
Investor Briefing 4 August 2020 1
Slide 3: Disclaimer
Disclaimer This presentation has been prepared by Incitec Pivot Limited (“IPL”). The information contained in this presentation is for information purposes only. The information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis f
Slide 4: Table of Contents
Table of Contents Strategy Jeanne Johns Managing Director & Chief Executive Officer Finance update & Response plan Nick Stratford Chief Financial Officer Explosives & Technology Jeanne Johns Managing Director & Chief Executive Officer Fertilisers Stephan Titze President Incitec Pivot Fertilisers Man
Slide 5: Strategy
Incitec Pivot Limited INNOVATION ON THE GROUND
Slide 6: Jeanne Johns
Jeanne Johns Managing Director & Chief Executive Officer 5
Slide 7: Growth Through Supporting Essential Industries
Growth Through Supporting Essential Industries INNOVATION AND HIGHEST QUALITY EXPOSURE TO 68% 1 REVENUE EXPLOSIVES 32% REVENUE1 COMPETITIVE ADVANTAGE AUSTRALIA’S LARGEST Best premium technology in the market today, ideally suited for growth markets/sectors INTEGRATED SUPPLIER Strategically located a
Slide 8: Deliver Shareholder Value
Deliver Shareholder Value Long-term growth underpinned by strategic drivers and cycle improvement 5 Fertiliser Recovery 4 Manufacturing Excellence • Unmatched platform to distribute advanced fertiliser products & 3 Explosives Growth • Opportunity of $40M to services • Poised for recovery in $50M3 pe
Slide 9: Attractive Long-Term Macro Drivers
Attractive Long-Term Macro Drivers IPL’s resilient end markets are underpinned by long-term global trends Urbanisation Digitisation Critical infrastructure World urban and rural population projected to 20501 Projected demand growth in the Global Datasphere (measured in zettabytes) 2,3 Average annual
Slide 10: Strategy Execution on Track
Strategy Execution on Track Target Progress Improve Zero Harm Performance ✓ TRIFR¹ of 0.56 YTD June FY 20, ahead of FY 21 target of 0.70 ✓ Reliability plans implemented across key plants Driving Manufacturing Excellence ✓ Substantial improvement in Waggaman and Phosphate Hill manufacturing performan
Slide 11: Finance Update & Response Plan
Finance Update & Response Plan 10
Slide 12: Nick Stratford
Nick Stratford Chief Financial Officer 11
Slide 13: Financial Framework
Financial Framework Maximising shareholder returns Focus on Balance Sheet strength Free cash flow generation Targeting higher returns • Commitment to maintaining an • Strong focus on Cost, Working Capital • Premium technology offering investment grade credit profile and Sustenance Capital delivering
Slide 14: Performance Update – 9 Months Ended June 2020
Performance Update – 9 Months Ended June 2020 Dyno Nobel Explosives • Mining volumes in Australia for the 9 months to June 2020 continue to be strong as the mining sector is operating well in a COVID-19 environment. Base & Precious Metals volumes YTD June 2020 remained strong, up 12% on the prior co
Slide 15: Response Plan
Response Plan Proactive response to COVID-19 impacts and low commodity prices Sustained incremental cost savings of $60M1 per annum by FY 22, made up as follows: • FY 20 Response plan of $20M1 per annum cost savings and $40M capital expenditure deferral announced at 1H20 ‒ Short term non-essential o
Slide 16: Dyno Nobel
Incitec Pivot Limited INNOVATION ON THE GROUND
Slide 17: Jeanne Johns
Jeanne Johns Managing Director & Chief Executive Officer 16
Slide 18: Explosives Growth Opportunity
Explosives Growth Opportunity Leverage premium technology, strategically located assets and strong customer relationships Americas – return to growth trajectory from FY 211 Rebuild Asia Pacific earnings from FY 211,2 • Leverage market leadership position in US • Solid platform of contracted tenure w
Slide 19: Dyno Nobel Americas Explosives
Dyno Nobel Americas Explosives Market leader with strong platform for growth Strategically located assets in diverse market DNA EBIT EBIT Margin U$’ mill % of Revenue Strong earnings growth 140 +12.4% 20 history, underpinned by: 120 • strategically located 18 assets 100 80 16 • premium technology of
Slide 20: Dyno Nobel Asia Pacific Explosives
Dyno Nobel Asia Pacific Explosives Rebuilding earnings, underpinned by market leading technologies Electronic Detonator sales Premium Emulsions sales Strategically located assets 2.0 80 Thousand metric tonnes Million units sold 1.5 60 16% 64% • Transformation to valued technology partner 1.0 40 +62%
Slide 21: Waggaman Operations
Waggaman Operations World scale plant in net import domestic market Ammonia Tampa Price ⎯ 800,000 metric tonnes annual name plate capacity US$/metric tonne Forecast2 ⎯ Operating continuously at full rates for more than 6 months 350 ⎯ North American market expected to remain net importer of 300 ammon
Slide 22: Explosives Technology
Digital integration, data and a connected bench Advanced products, systems and services Conventional products and systems Explosives Technology Base raw materials, support and services 21
Slide 23: Premium Explosives Technology
Premium Explosives Technology Best premium technology offering on the ground … and the numbers are showing it • Technology designed to be easy for customers to adopt, with plug-in Premium Emulsion capability a key design principle Electronic Detonators (thousand metric tonnes sold) (million units so
Slide 24: Strong Technology Pipeline
Strong Technology Pipeline Delivering new technology innovations on the ground Technology pipeline framework Strong progress on technology alliance with largest miner in the world • Customer collaboration Our premium technology improving mining efficiencies – completed • Practical solutions, with ea
Slide 25: Fertilisers Asia Pacific
Incitec Pivot Limited INNOVATION ON THE GROUND
Slide 26: Stephan Titze
Stephan Titze President Incitec Pivot Fertilisers 25
Slide 27: Fertilisers Asia Pacific
Fertilisers Asia Pacific Australia's leading and only integrated East Coast supplier of premium fertiliser solutions KEY SHORT TO MEDIUM TERM DISTRIBUTION BUSINESS RESILIENT WITH GROWTH DRIVERS CONSISTENT VOLUMES AND CASHFLOWS • Distribution volume averaged ~2 million tonnes per annum • Rising globa
Slide 28: Fertilisers – Manufacturing
Fertilisers – Manufacturing Manufacturing Excellence strategy to drive sustained performance improvement Phosphate Hill Gibson Island • Highly leveraged to global DAP price, >15% price recovery • Low nitrogen prices & high gas cost making profitable since 1H20 low operations challenging • Focus on i
Slide 29: Fertilisers – Distribution
Fertilisers – Distribution Distribution business consistently profitable Fertilisers Asia Pacific – EBITDA A$ million Stable earnings through the cycle 200 • Profitable & stable distribution earnings history 160 120 • Resilient business even in times of drought, Manufacturing 80 Distribution attribu
Slide 30: Fertilisers Asia Pacific
Fertilisers Asia Pacific Transformation to a leading Australian soil health company Sustainable Soil Health Company Leading Plant Nutrition Company Leading Fertiliser Specialised Products and Services Initiatives Company Specialised Products & New Markets Renewables from waste Expand liquid fertilis
Slide 31: Conclusion
Conclusion Strong Distribution business and improving market conditions Favourable long term global fertilisers fundamentals, improving Australian conditions and highly leveraged to current low fertilisers prices Profitable Distribution business with strong capability and opportunity to take advanta
Slide 32: Manufacturing Excellence
Manufacturing Excellence 31
Slide 33: Tim Wall
Tim Wall President Global Manufacturing & Corporate HSEC 32
Slide 34: Manufacturing Excellence
Manufacturing Excellence Strategy on a page Zero Harm • For our people & the environment • Process Safety focus • Reliable operations are safe and efficient People and Culture • High reliability mindsets underpin our people and culture approach High Reliable Operations Reliability • Detailed plans d
Slide 35: Manufacturing Excellence
Manufacturing Excellence Substantial improvement in manufacturing performance Phosphate Hill 12-month rolling Ammonium Phosphates production – June • Zero Harm performance continues to improve (TRIFR of 0.56 YTD June 2020) 1,200,000 +30% • Strong reliability improvement across key plants Metric tonn
Slide 36: Manufacturing Excellence: On track to deliver target by FY22
Manufacturing Excellence On track to deliver Manufacturing Excellence target by FY22 Ammonia Reliability2 – Major Plants 100% +7% Target: 95%(3) 7% improvement 90% Baseline: 85%(3,4) YTD, on track to 80% deliver $40M to $50M1 by FY 22 70% Overall % reliability 60% Response plan 50% Phosphate Hill Wa
Slide 37: Conclusion
Conclusion Strong progress toward reliable operations Zero Harm & Safety performance improvement remains #1 priority Opportunity of $40M to $50M1,2 per annum by FY 22 still in place Focus on turnaround execution under new strategy Improve capital efficiency & cost competitiveness 1) Opportunity for
Slide 38: Key messages & Conclusion
Incitec Pivot Limited INNOVATION ON THE GROUND
Slide 39: Jeanne Johns
Jeanne Johns Managing Director & Chief Executive Officer 38
Slide 40: Key Messages & Conclusion
Key Messages & Conclusion Resilient business, well set up for growth 1 Resilient Critical supplier to essential industries that have remained resilient End Markets through COVID-19 2 Response A$60M1 EBIT uplift per annum from expected cost savings by Plan FY22, driving margin expansion 3 Explosives
Slide 41: Questions & Answers
Incitec Pivot Limited INNOVATION ON THE GROUND Questions & Answers 40
Slide 42: Questions and Answers – Panel Members
Questions and Answers – Panel Members Nick Stratford Braden Lusk Greg Hayne Chief Financial Officer President President Dyno Nobel Americas Dyno Nobel Asia Pacific Jeanne Johns Managing Director & Chief Executive Officer Stephan Titze Tim Wall Robert Rounsley President President Global Chief Technol
Slide 43: Appendix
Incitec Pivot Limited INNOVATION ON THE GROUND APPENDIX 42
Slide 44: Performance Update – YTD/Q3 FY 2020
PERFORMANCE UPDATE – YTD/Q3 FY 2020 Volumes & Pricing Volumes – thousand metric tonne 1H FY20 3Q FY20 3Q YTD FY20 Phosphate Hill production (ammonium phosphates) 457 253 710 Gibson Island production (urea equivalent) 157 125 282 Waggaman production (ammonia) 363 208 571 Moranbah production (ammonium
Slide 45: Bowen Basin Coal
US Crushed Stone Production1 Global Refined Copper Consumption2 Bowen Basin Coal2 Million tonnes Thousand tonnes Prime overburden (mbcm pa) / Coal production (Mt pa) Industry peak 1,800 35,000 6,000 250 1,600 30,000 1,400 5,000 200 25,000 1,200 4,000 1,000 20,000 150 3,000 800 15,000 100 600 2,000 1
Slide 46: Fertilisers Asia Pacific
FERTILISERS ASIA PACIFIC Improving conditions Strong long term fundamentals • Wetter than average conditions through most of 2020, • Fertilisers is important for enhancing agricultural supporting strong fertilisers demand productivity, with an estimated ~5 million tonnes2 applied in 2019 , ~70% in E