Orica Limited · ASX:ORI
Orica — Investor Presentation (June 2009)
59 slides from Orica's investor presentation, Jun 3, 2009
Slide 1: 2009 Investors & Analysts Site Visit
2009 Investors & Analysts Site Visit Sydney 3 June 2009
Slide 2: 2009 Investors & Analysts Site Visit - Michael Reich
2009 Investors & Analysts Site Visit Michael Reich Sydney 3 June 2009
Slide 3: Presentation Outline
Presentation Outline • Update on Business • Integration and Synergies • Industry drivers • Market environment • Competitive advantage • Growth • Ten year vision 3
Slide 4: Minova – a global leader in its segment
Minova – a global leader in its segment Mission Minova is a manufacturer and marketer of high quality specialty chemicals and bolts that enhance the safety and efficiency of underground mining and tunnel operations Strategy To be the global leader in ground stabilisation systems to the underground m
Slide 5: Minova's global reach
Minova’s global reach Lenisk Kuznetsk (Russia) Kemerovo Essen (Russia) Alfreton (Germany) Karaganda (UK) Poland (Kazakhstan) Marion Carspach Ukraine Clearfield (Utah) (Illinois) Czech (France) Grand Junction Ohio Spain (Colorado) Georgetown Beijing Blue Field (West Virginia) (Kentucky) Taian Grundy
Slide 6: Minova: Sales $503M; EBIT $59M
Minova Sales $503M; EBIT $59M $M EBIT 9% 90 2 (15) 6 80 11 70 (3) 64 (3) (4) 60 59 50 40 30 20 10 0 HY08 EBIT Synergy FX Cash Fixed Steel Price Price / Mix Volume Acquisition HY09 EBIT Benefit Costs/Other Under- Amortisation recovery Delivery of synergy benefits progressing to plan Price competition
Slide 7: Minova – good strategic fit for Orica
Minova – good strategic fit for Orica • Safety critical, high service mining consumables • Low proportion of customer’s spend • Exposed to production volumes and not commodity prices – earnings less cyclical • High EBIT ratios and strong cash conversion • Low capital intensity • Leveraging on Orica
Slide 8: Minova's competitive advantage
Minova’s competitive advantage • Leading global player • Strong financial backing • Brand and reputation • Increased focus and spend on R&D • Unique technology and product offering • Customer / supplier relationships • Low cost manufacturer • Minova is well positioned in emerging markets 8
Slide 9: Global Management Team
Global Management Team bd MINOVA
Slide 10: Acquired Minova business performance
Acquired Minova business performance Half year ended 31 March (A$M) 2009 Synergies delivered 13.5 1 Synergy Benefit (A$M) 2008 2009 2010 2011 Current View (Total) 11 25 37 45 1 EBIT synergies only, excludes taxation synergies. Integration is on track – at a lower implementation cost 10
Slide 11: Industry Growth drivers
Industry Growth drivers • Minova’s products are not optional for underground mines and tunnels to operate Thermal Coal Production Projections 1 − Need for production efficiency 800 − Compliance with mine and tunnel safety requirements 700 million tpa • Strong link to underground coal mining (~70% of
Slide 12: Geography & End Markets (2009 HY)
Geography & End Markets (2009 HY) 2009 HY Revenue 2009 HY Revenue Contribution (Geography) Contribution (End Markets) Latin America Other Australia / Asia 1% 11% 18% Gold 5% EMEA 41% Tunnelling 13% Thermal Coal 56% Coking Coal North America 40% 15% 12
Slide 13: Growth
Growth • China growth and shift to higher safety standards • Canada & Latin America market entry • Global expansion of coal bolt offering - China - Russia, Ukraine and Kazakhstan • Global expansion of European tunnelling business • Market share and margin growth through product development and diffe
Slide 14: Minova's 10 Year Vision
Minova’s 10 Year Vision • Recognised as global leader in roof bolting and ground support • Leading industry in SHE performance • Customers value Minova’s distinctly superior product and service offering • Technology innovator and solutions provider – customer driven – IP/patents on key products – Ac
Slide 15: Asia Pacific and Africa (APA) Karen Stoffels
Asia Pacific and Africa (APA) Karen Stoffels
Slide 16: Minova APA Region
Minova APA Region • APA is approximately 20% of the Minova group’s turnover • Employs 900 people, mostly in South Africa and China • Headquartered in Melbourne, Australia with manufacturing facilities in Australia, China, South Africa and India • Technical centres in Australia, South Africa and Chin
Slide 17: Experienced APA management team
Experienced APA management team Pete Ferreira, MD RSA David Williams, Business Development – Mining Engineer – Mining Engineer – 3 years with Minova – 20 years with Minova – Since 1994 in mining – Significant business development contracting experience in new territories Donald O’Connor, India Thors
Slide 18: Minova's global reach
Minova’s global reach Lenisk Kuznetsk (Russia) Kemerovo Essen (Russia) (Germany) Karaganda Alfreton Poland (Kazakhstan) Marion (UK) Ukraine Clearfield (Utah) (Illinois) Czech Carspach Ohio Grand Junction (France) Beijing (Colorado) Blue Field (West Virginia) Georgetown Taian Grundy (Virginia) (Kentu
Slide 19: New operations
New operations Taian Bolt Plant, China SEA/Pacific, Taipei Office 19
Slide 20: Industry attractiveness
Industry attractiveness • Relative small % of total mine/tunnel spend but critical to operations and productivity • Increasing focus on safety • Critical safety aspect of products • Customer and industry approvals required • Inherit risk aversion in market • Period of market consolidation over past
Slide 21: Global alliances
Global alliances In cooperation with FiRep International AG (Switzerland) Minova offers a range of glass fibre reinforced plastic (GRP) bolts. In August 2008, Minova signed a worldwide cooperation agreement in the field of ground control and geotechnics for the mining, tunnelling and civil engineeri
Slide 22: APA end customer segments
APA end customer segments Thermal Coal Coking Coal Gold Platinum Other Metals Other • Broader exposure to base metals compared with rest of Minova • Coal remains our major market (Australia, China) • Gold business holding up well with some short term softening in platinum due to price • Civils is cu
Slide 23: The importance of the APA Region
The importance of the APA Region • Focus on growth • Enough critical mass to establish centres of expertise • Mix of mature and high growth markets (China and India) so able to leverage people and experience • Optimisation of manufacturing footprint (lower cost producer) • Common multi national cust
Slide 24: Main organic growth opportunities
Main organic growth opportunities • Coal bolts Expanded • India, injection chemicals Offer • Autorock drilling equipment • China, market penetration • China, new provinces Expanded • Mining in SEA Geography • South African neighbouring countries • SEA civil New Markets, Existing • China civil Produc
Slide 25: A bright future
A bright future • We are a major player with a well recognised brand in an attractive Industry • Offer “best portfolio” of products and services • We have well established businesses in countries with high GDP growth • Well positioned to take advantage of government funded infrastructure stimulus pa
Slide 26: Minova Australia
Minova Australia A unique business
Slide 27: Vision
Vision To be the mining, tunnelling and civil industry’s leading provider of quality and innovative materials technology solutions
Slide 28: Safety, Quality, Environmental Commitment
Safety, Quality Environmental Commitment • Safety accreditation AS4801:2001 (2003) • Quality accreditation ISO9001:2000 (1994) • Environmental accreditation ISO14001:2004 (2006)
Slide 29: Australian Group
Australian Group Products - Development - Manufacture - Supply and Service Services - Specialist product application - Emergency response - Secondary support - Ventilation Control Devices
Slide 30: Major competitors by product
Product Major competitors Steel products - Coal Jennmar, DSI Steel products - Metal DSI Resin capsules Jennmar, DSI Specialist cements BASF, Parchem Injection systems Weber, BASF Wilson Mining Services, Emergency Response Resco Wilson Mining Services, Ventilation Contracting Anderson Mining
Slide 31: Our market
Our market Zinc Civil Nickel 4% Gold 33% Copper 4% 3% 6% Distributors 10% Thermal Coal 15% Coking Coal 25%
Slide 32: Our history… shaping us today
Our history… shaping us today 1972 1987 1991 1997 1996 Resin Capsule Diversification Introduction of New market Strategic change to diversification production into cement global sales & marketing (Chemfix) grouts technology into metal focus mining 1999 2004 2006 2008 2009 Diversification Global Carb
Slide 33: Our locations
Our locations Mackay Wyong Perth Smithfield Nowra Metal mines Steel manufacturing Chemical manufacturing Coal mines Operations Chemical manufacturing and Operations
Slide 34: SCS Acquisition
SCS Acquisition • Leading Design, Manufacture and Supplier to the Australian hard rock mining industry • Recognised leader in the introduction of new technology • Manufacturing facilities in Sydney and Perth • Accredited Quality Control • Largest Research & Development department • Experienced produ
Slide 35: Product Range
Product Range • Lokset Resin Capsules • Specialised Bolting Grouts • Cavity Filling Resin and Cement Grouts • Rockfill Consolidation Grouts • Resin Injection Systems • Sprayed Support Products • Ventilation Systems
Slide 36: Product Range
Product Range • Strata (Friction) Bolts • Secura (Resin) Bolts • Cable Bolts • Strata Tunnel Bolts • Plates – Dome, Flat, Combi • Mesh • Drivers & Accessories
Slide 37: Operations Division - Specialists
Operations Division - Specialists • Emergency response service - Fall recoveries (development, longwall) - Strata Injection (polyurethane, silicate) - Industry’s only manufacturer/applicator • Support Services - Cavity fill (cement grout, phenolic resin) - Primary and secondary bolting - Backfilling
Slide 38: Operations Division - Specialists
Operations Division - Specialists • Underground Mine Ventilation contractor - Explosion rated seals and stoppings - Fabricated overcasts, vehicle doors, man doors - Windblast bulkheads - Largest range of live tested devices - Qualified mining (ventilation) engineer - System audits
Slide 39: Research and Development
Research and Development • Global structure • Significant Australian resource - Chemists - Mechanical Engineers - Mining Engineers - Draftsman - Designers • Focused development program • State of the art facilities
Slide 40: s z =
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Slide 41: Successful Development Projects
Successful Development Projects • Hard rock ventilation upgrade - Reduce productivity loss from inefficient ventilation systems - Several devices developed and/or enhanced - Live tested - Retrofitted - Upgrade successful in significantly reducing productivity loss
Slide 42: Warratah Rivulet Stream Remediation
Warratah Rivulet Stream Remediation Robert Hawker Product Manager Minova Australia
Slide 43: When the river runs dry
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Slide 44: Project overview
Project overview • Major environmental issue for many rivulets/streams in the Illawarra region • Previous remediation methods included sand and then sand plus colloidal silica binder. These were of limited success due to sand mobilisation and further cracking within the active subsidence zone • Two
Slide 45: Mine Details
Mine Details • Mine located 31km north of Wollongong and 50km south of Sydney • Longwall operations are conducted at the mine, working the Bulli Seam at Depth of 400-500m • Mine is situated within land owned by the Sydney Catchment Authority and mines under Waratah Rivulet • Waratah Rivulet has catc
Slide 46: Mine Location
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Slide 47: Mining overlay
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Slide 48: WRS4 site pre injection
WRS4 site pre injection
Slide 49: Up-sidence within rivulet
Up-sidence within rivulet
Slide 50: WRS4 Details
WRS4 Details • Relatively flat section with width of 60m • Fracture network caused by thrusting along cross beds, buckling near surface beds and tensile cracks due to up-sidence • Depth and extent of fracture network measure to determine injection pattern and sequence • Permeability measured to be 1
Slide 51: SCA Approval
SCA Approval • Environmental Management plan implemented • Site Transport and PUR storage system developed • CarboPUR Toxicity and Ecotoxicity tests completed • Injection plan and sequence established
Slide 52: Injection Details
Injection Details • 65mm core holes drilled to depth of 20m for injection • Product and pump stored within bundled trailers on river bank • 3/8 inch high pressure injection hoses used for injection 150m from pump site • Product injected at maximum 100 bar pressure • 57000L of CarboPUR injected into
Slide 53: WRS4 drill plan
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Slide 54: WRS4 site post injection
WRS4 site post injection
Slide 55: WRS4 post injection
WRS4 post injection MINOVA
Slide 56: WRS4 injection coverage
WRS4 injection coverage
Slide 57: Summary
Summary Peabody’s Metropolitan Colliery took first prize in the environment category for its successful remediation of a stream rock bar at the Waratah Rivulet. The company has successfully completed a remediation trial using polyurethane (PUR) to repair localised cracking in a section of the rivule
Slide 58: Acknowledgements
Acknowledgements Special thanks to Peabody Metropolitan Colliery and in particular the following people. • Greg Tarrant – Technical Services Manager (Metropolitan Colliery) • Patrick Brienen – Brienen Environmental Services • Stacey Braund – Senior Environmental Mgr (Resource Strategies P/L)
Slide 59: 2009 Investors & Analysts Site Visit
2009 Investors & Analysts Site Visit