Orica Limited · ASX:ORI
Orica — Merger or Acquisition (May 2006)
10 slides from Orica's merger presentation, May 10, 2006
Slide 1: Sale of IPL stake by Orica
DQorica a : Le =e SALE OF IPL : 17) STAKE BY ORICA ASX Announcement ee ee 10 MAY 2006
Slide 2: Rationale for the Sale
RATIONALE FOR THE SALE * Creating value for Orica shareholders. * Due to seasonal variations in rainfall, the cyclicality of international urea prices, and foreign exchange movements IPL’s earnings can be volatile. * Makes strategic sense for both Orica and IPL. « IPL can play a broader role in the
Slide 3: Estimated Profit on Sale
ESTIMATED PROFIT ON SALE* Gross Proceeds — 1st Tranche Gross Proceeds — 2" Tranche Carrying Value 30/4/06 Estimated Transaction Costs & Related Provisions Estimated Tax Estimated After Tax Profit on Sale ' 1 Recognised as an individually significant item in the 2006 financial year. A$ millions 692 1
Slide 4: Other Financial Impacts
OTHER FINANCIAL IMPACTS J IPL’s 22 cents fully franked interim dividend will accrue to Orica for the total 70% stake. Orica will own only 13.5% from 10 May until the second tranche of sale (buyback) is complete. Therefore, IPL’s second half earnings will only accrue to Orica from April 1 to 10 May.
Slide 5: Other Financial Impacts (continued)
OTHER FINANCIAL IMPACTS (continued) Impact on Franking of Orica Dividends: IPL contributed 16.85 cents and 9.27 cents to franking of Orica’s 2004 and 2005 dividends respectively. The loss of IPL’s franked dividends will negatively impact Orica’s ability to pay franked dividends. Orica currently esti
Slide 6: Earnings Contributions of Business Platforms
EARNINGS CONTRIBUTIONS OF BUSINESS PLATFORMS EBIT by business platform 2005 Chemicals Services Chemnet 9.2% 11.8% Consumer Products 15.2% Fertilisers 12.6% ” Mining Services 51.2% EBIT by business platform 2005 Chemnet Chemicals 13.5% Services 10.5% Consumer Products 174% Mining Services 58.6% "| Ex
Slide 7: Earnings Contribution by Geography
EARNINGS CONTRIBUTION BY GEOGRAPHY Including IPL New Zeal 9.5% EBIT by geographic area 2005 Other 126% Americas 16.1% land EBIT by geographic area 2005 Other 144% Americas. 18.4% New Zealand 10.3% Australia 56.3% "| Excluding Fertilisers
Slide 8: Gross Sales by Business Platforms
GROSS SALES BY BUSINESS PLATFORMS cluding Ik uding IPL Gross sales by business platform 2005 Chemicais Chemnet Services 19.5% 7.8% Consumer Products 14.6% ith ) Mining Services 7 37.7% Fertilisers 20.4% Gross sales by business platform 2005 “) Chemnet 24 5% Chemicals Services 9.8% Mining Services Co
Slide 9: Gross Sales by Geography
GROSS SALES BY GEOGRAPHY Gross sales by geographic area 2005 Other 11.4% Americas 172% New Zealand 94% " Australia 81.3% Gross sales by geographic area 2005 () Other 44.3% Americas 22.4% ” Australia 51.5% New Zealand 11.8% (l Exeluding Fertilisers
Slide 10: Use of Funds
USE OF FUNDS Orica will use the funds generated by the sale of its IPL stake to: * Reduce short term debt by up to $400 million (short term excess cash will be held on deposit). ¢ Fund growth opportunities that meet Orica’s 18% return On Net Assets criteria, including: — brownfields or greenfields c