Orica Limited · ASX:ORI
Orica — Non-Deal Roadshow (June 2004)
33 slides from Orica's roadshow presentation, Jun 28, 2004
Slide 1: Orica Limited USA Roadshow June 2004
Orica Limited USA Roadshow June 2004 Z a Jim Hall - Executive | oel Meehan- Group | a ee ae
Slide 2: Contents
CONTENTS ¢ Orica Background ¢ Business Overview ¢ Efficiency, Strategy and Culture * Recent Financials * Outlook
Slide 3: Orica - Background
ORICA - BACKGROUND
Slide 4: Snapshot
Orica — snapshot 2 Australian owned publicly listed company trading on the Australian Stock Exchange (ORI) Market capitalisation of A$4bn (US$2.7 bn) Ranked in top 50 Australian companies based on market capitalisation Operates in over 35 countries - 9000 employees Comprises four business platforms
Slide 5: Group Executive
Orica — Group Executive
Slide 6: What we do
Orica — what we do Mining Services Market — bon) * Commercial explosives plus blast Leadership management Chemicals Leading * Niche chemical manufacturing plus : Brands chemical trading, value add and Businesses distribution unite’ by enemica Strong assets Consumer Products sciences g / * Paint, pai
Slide 7: Business dimensions in 2003
Orica — business dimensions in 2003 Sales Revenue EBIT Employees 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% BMining mFertilisers OCP Chemicals Note: Fertilisers comprises 8 months of Incitec Fertilizers plus 4 months of the merged incitec Pivot (effective 1 June 2003) ORICA > $4Bn cs $442M -—> 9,00
Slide 8: Business Overview
BUSINESS OVERVIEW
Slide 9: Business characteristics
Orica — business characteristics
Slide 10: Business drivers
Orica — business drivers 10
Slide 11: What makes our businesses attractive
Orica - what makes our businesses attractive * Our businesses operate largely in good industry structures * Our businesses have a record of delivering consistent steady returns * We have privileged asset position in Australia and overseas « QOur businesses are market leaders - brands and technology
Slide 12: Why should you invest?
Orica - why should you invest? * Orica is positioning to be the number one global “niche” chemical company through: — market leadership in niche markets and/or selected geographies — significant expansion opportunities — the delivery of consistent economic profits * We have strict financial investme
Slide 13: Approach to how we do things
Orica - Approach to how we do things —e. irategy 13
Slide 14: What our approach has delivered
Orica - What our approach has delivered NPAT A$ Orica NPAT and Share Price 300 16 250 145 200 12% 150 10a £ 100 : 8 z 50 Uv | 6 o™ ‘g 4 & s Mar-03 | Jun-03 bon! N N 9 8 8 c Qo. e J Cy o ° a a Mg NPAT — Share price Sep-03 Dec-03 Mar-04 30 September year end 14
Slide 15: Creating value for shareholders
Orica - CREATING VALUE FOR SHAREHOLDERS 400) Relative performance (base Orica share price performance compared to Australian All Ordinaries N a A a 2 9 9 t+ $s 8s §$ § § § §€§ $F FSF Fé Fsgssss 7 9 7 FF Ff 8 FF §& F&F F S$ 9 2 § © 2B ¢ 2 EF € PDH Oo 2 FE S&S ¢ oo & 5 S&S ¢ © & 5S 35 o@ @ 2 5s o86B F
Slide 16: Strategy
STRATEGY
Slide 17: Strategy and execution
Orica — strategy and execution Lt F bn “Build on Strength” a. Lu 3 oO ° OEP = (= 18% 2 RONA) £ 5 wi Growth 17
Slide 18: Simple strategy, superior results
Orica — simple strategy, superior results Bolt on acquisitions and geographic expansion Plant expansions that meet IRR 15% & 18% RONA minimum Organic growth and productivity gains will generate significant free cash Growth in earnings 18
Slide 19: Where do growth opportunities lie?
Orica - Where do growth opportunities lie? Mining Services Chemicals * New geographies * Leverage off existing acquisitions + Plant expansions * Organic and acquisitive growth * Organic growth + Commercialisation of new technologies Consumer Products Fertilisers * Further category expansion * Captur
Slide 20: Recent growth scorecard
Orica - recent growth scorecard A$M Mergers and Acquisitions - Incitec minorities buyout - Fernz - Welvic & Engineering Plastics - Initiating Explosives Systems - Indian Explosives - Yates - Znamja JV in FSU - Branson and Jacobs - SMI technology Brownfield Expansion - Yarwun - Kooragang Island Ferts
Slide 21: Culture
Orica - culture SH&E Commercial Ownership Creative Customer Solutions Working Together __DELIVER THE PROMISE 21
Slide 22: Recent Financials
RECENT FINANCIALS
Slide 23: Financial Summary
FINANCIAL SUMMARY Underlying Results: Sales Revenue NPAT (excluding significant items) EBIT (excluding significant items) Results including significant items: Significant items after tax NPAT including significant items Coverage Ratios: Gearing Interest cover ASM | ASM ASM ASM | ASM | }| Sep-02 | 4,
Slide 24: Long term EBIT trend of existing businesses
Orica — Long term EBIT* trend of existing 4 businesses ASM 500 | 450 7 400 5 350 5 300 4 250 5 200 4 o4 5 2 28 5 § @ = 8 8S & & ee N 9 o © © © BD B® DB So ® G&G & & S o 93 2 O92 ® ® ® ® ® ® ® FB B® GB B&B o SS Se SF SF & F&F FF F&F F&F F&F &F $F SF + A a a | 2001 | HY04 BUSINESS IS NO LONGER DEEPLY
Slide 25: Shareholder Scorecard
SHAREHOLDER SCORECARD Underlying Results: Earnings per share cents Return on shareholders’ funds % Returns to Shareholders Dividends cents Payout ratio % Sep-02 86.0 18.0 44 51 On 11 May 2004, 5% on market buyback completed. 13,954,402 shares bought back for total consideration $176.8M. 25
Slide 26: Cash Flow
CASH FLOW Net operating cashflows Net investing cashflows Net financing cashflows Net increase/(decrease) in cash Working Capital Inventories Trade debtors Trade creditors TWC/sales ASM) ASM | ASM Sep-03), 500 (385) (173 (58) 583 501 (413 671 116.9%) 26
Slide 27: Financial Position
FINANCIAL POSITION asu March Sept 2004 2003 Trade working capital 751 671 Net property, plant & equipment 1,450 1,437 Net other assets 363 350 Net debt (1,029) (877) Net Assets 1,535 1,581 Orica shareholders’ equity 1,338 1,385 Outside equity interests 197 196 Equity 1,535 1,581 March 2003 571 1,326
Slide 28: Net Debt, Gearing and Interest Cover
Net Debt, Gearing and Interest Cover Pa ze 1200 45% + 40% 1100 + Target + 35% Gearing Rang = 1000 ; 30% a < + 25% & 900, 8 + 20% 2 800 4 + 15% + 10% 700 + | + 5% 600 T T T T T T 0% HY01 FY01 HY02 FY02 HY03 FY03 HY04 Gearing Gearing 40.1%, target gearing range of 30 - 40% Interest cover 5.9x. Target
Slide 29: Foreign Currency - Risk Management
FOREIGN CURRENCY- Risk Management Derivative Instrument Typical use A$ call options Exposures greater than 12 months Foreign exchange contracts Exposures less than 12 months 29
Slide 30: Foreign Currency - Snapshot
FOREIGN CURRENCY-Snapshot A$ Call Options: Hedging of USD Exposure (as at 31 March 2004) Offshore Business Manufactured Hedge Sales Nitrogen Product | | Premium Year | Cover Strike Cover Strike expense ASM Rate ASM Rate (full year) 2004 53 59 cents # # $3M 2005 88 61 cents 59 68 cents $6M 2006 54 67
Slide 31: Foreign Currency - Sensitivity
FOREIGN CURRENCY- Sensitivity Assuming a AUD/USD exchange rate of 72 cents every one cent movement in the exchange rate will impact EBIT: 2005 +/- $1M 2006 +/- $1M - $2M 31
Slide 32: Outlook for 2004
OUTLOOK FOR 2004 We normally have a second half bias due to seasonally higher demand for mining services and fertilisers, and that will occur again this year. There are three caveats, which will determine the extent of the bias: — extent and timing of rainfall; — amount of additional spending on res
Slide 33: Disclaimer
Disclaimer In addition to historical information, this report contains forward-looking statements. Such statements include those concerning Orica Limited's (‘the Company”) expected financial performance and its strategic and operational plans, as well as all assumptions, expectations, predictions, i