Orica Limited · ASX:ORI
Orica — Investor Day (September 2023)
62 slides from Orica's investor day presentation, Sep 19, 2023
Slide 1: Orica's Sustainability Investor Day ASX Announcement
ASX ANNOUNCEMENT ORICA’S SUSTAINABILITY INVESTOR DAY 19 SEPTEMBER 2023 Orica accelerates climate change action and reaffirms strong FY2023 business performance Melbourne: Orica (ASX: ORI) today announced accelerated climate change targets, including: • an increased target to reduce net operational S
Slide 2: Say on Climate and FY2024 outlook
ORICA ASX ANNOUNCEMENT 2023 SUSTAINABILITY INVESTOR DAY 2 Say on Climate Orica will put forward a ‘Say on Climate’ resolution at this year’s Annual General Meeting in December, offering the opportunity for shareholders to consider Orica’s 2023 Climate Action Report. Maintaining strong business momen
Slide 3: About Orica
ORICA ASX ANNOUNCEMENT 2023 SUSTAINABILITY INVESTOR DAY 3 ABOUT ORICA Orica (ASX: ORI) is one of the world’s leading mining and infrastructure solutions providers. From the production and supply of explosives, blasting systems, mining chemicals and geotechnical monitoring to our cutting-edge digital
Slide 4: Sustainability Investor Day September 2023
19 SEPTEMBER 2023 SUSTAINABLY SUSTAINABILITY INVESTOR DAY MOBILISING THE EARTH'S RESOURCES
Slide 5: Disclaimer and Important Notices
DISCLAIMER AND IMPORTANT NOTICES This investor presentation (Presentation) is dated 19 September 2023 and has been prepared by Orica Limited (ABN 24 004 145 868) (Orica). This Presentation is for information purposes only and is a summary only. It should be read in conjunction with Orica’s most rece
Slide 6: Agenda
AGENDA 0930 0935 Welcome and acknowledgement of country Delphine Cassidy Chief Communications Officer 0935 0945 Safety, health and environment update Leah Barlow President - SHES, Discrete Manufacturing and Supply 5 0945 1000 Business update Sanjeev Gandhi Managing Director and Chief Executive Offic
Slide 7: Presenters
SUSTAINABILITY INVESTOR DAY PRESENTERS SANJEEV GANDHI DELPHINE CASSIDY LEAH BARLOW ANDREW STEWART Managing Director Chief Communications President - SHES, Discrete Chief Development and Chief Executive Officer Officer Manufacturing and Supply and Sustainability Officer ANGUS MELBOURNE BERTUS DEVILLI
Slide 8: Safety, Health and Environment Update
SAFETY, HEALTH AND ENVIRONMENT UPDATE LEAH BARLOW PRESIDENT – SHES, DISCRETE MANUFACTURING AND SUPPLY 2023 SUSTAINABILITY INVESTOR DAY 5
Slide 9: Safety Is Orica's Top Priority
SAFETY UPDATE SAFETY IS ORICA’S TOP PRIORITY Keeping our people safe remains Strengthening and expanding our our primary goal safety program and culture • Safety targets on track • Embedding MHM in everyday work through Safety Leadership Program Serious Injury Case Rate1 Detailed reviews after two •
Slide 10: Commitment to Strong Environmental Stewardship Across Our Operations
PROTECTING NATURAL RESOURCES COMMITMENT TO STRONG ENVIRONMENTAL STEWARDSHIP 0 ACROSS OUR OPERATIONS environmental incidents (severity ≥31) since FY2018 Focus on prevention Optimising resource use • Preventing loss of product to avoid • Working to improve the water efficiency of adverse environmental
Slide 11: Business Update
BUSINESS UPDATE SANJEEV GANDHI MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER 2023 SUSTAINABILITY INVESTOR DAY 8
Slide 12: Successfully Executing Our Strategy
STRATEGY SUCCESSFULLY EXECUTING OUR STRATEGY 2023 SUSTAINABILITY INVESTOR DAY 9
Slide 13: Strong Performance Continues in Second Half
BUSINESS UPDATE STRONG PERFORMANCE CONTINUES IN SECOND HALF FY2023 outlook • 2023 full-year results are expected to be in line with guidance given at the first half results in May 2023; the strength of Orica’s performance is expected to continue for the full year FY2023 • Trade working capital and
Slide 14: Continuous Manufacturing Plant Turnarounds
BUSINESS UPDATE CONTINUOUS MANUFACTURING PLANT TURNAROUNDS FY2023 FY2024 Expected to be completed on time and within budget Scheduled turnarounds 1H23 2H23 1H24 2H24 Kooragang Island (NSW) Turnaround including tertiary abatement NAP1/ AN1 installation NAP NAP Tertiary abatement installation 2 3 Even
Slide 15: Orica's Accelerated Climate Change Targets and Ambition
STRENGTHENING ORICA’S CLIMATE CHANGE COMMITMENTS ORICA’S ACCELERATED CLIMATE CHANGE TARGETS AND AMBITION DELIVERING ON OUR CLIMATE ORICA’S ACCELERATED CLIMATE CHANGE CHANGE COMMITMENTS TARGETS AND AMBITION Net GHG emissions reduction (Scope 1 and 2, ktCO2-e) Operational net Scope 1 and 2 -13.7% At l
Slide 16: Delivering Value to Our Shareholders
OUR INVESTMENT PROPOSITION DELIVERING VALUE TO OUR SHAREHOLDERS OUR PROMISE Operating responsibly together with our people, partners, customers Safety is, and will We are the global We have reshaped remain our number leader in mining and civil our strategy and we one priority construction markets ar
Slide 17: Positioning Orica for the Future
POSITIONING ORICA FOR THE FUTURE SANJEEV GANDHI MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER 2023 SUSTAINABILITY INVESTOR DAY 14 Pine Bluff Quarry, Kentucky
Slide 18: Mining Is at the Core of the Energy Transition
THE FUTURE OF MINING MINING IS AT THE CORE OF THE ENERGY TRANSITION Estimated absolute change in commodity demand in 2040 vs 2020 100% 1.5°C aligned 80% 3°C scenario 60% 40% 20% 0% -20% -40% -60% -80% Copper Other Q&C Gold Iron Ore Met Coal Thermal Coal Future-facing Commodities -100% Source: Orica’
Slide 19: Orica's Role in a Decarbonised Future
ORICA’S ROLE IN A DECARBONISED FUTURE REPOSITIONING FOR THE FUTURE Revenue by commodity1 AN tonnes (‘000) and operational net GHG emissions (ktCO2-e) +7% 11% Increasing business resilience while FFC and other2 16% continuing to grow and progressing with 7% climate change commitments Met coal 6% 9% I
Slide 20: Supporting the Growth of Lithium in Australia
SUPPORTING THE GROWTH OF LITHIUM IN AUSTRALIA Orica’s mine to mill technology ORICA SERVICING MORE THAN and digital solutions well 50% OF THE AUSTRALIAN HARD matched to key technical challenges in hard rock ROCK LITHIUM INDUSTRY lithium mining Understanding Orebody intelligence such as orebody to AX
Slide 21: Disciplined Approach to Capital Allocation
CAPITAL MANAGEMENT OUR STRATEGY IS UNDERPINNED BY A DISCIPLINED APPROACH TO CAPITAL ALLOCATION Investments in sustainability projects Orica’s capital allocation framework • Compete for capital under our capital allocation framework • Aligned with our decarbonisation commitments and opportunities to
Slide 22: Government Support Needed for Industry Transition
ENABLING THE ENERGY TRANSITION GOVERNMENT SUPPORT NEEDED FOR INDUSTRY TRANSITION POLICY STABILITY SUPPORTING INDUSTRY DURING FACILITATING NEW MARKETS TRANSITION AND SECTORS • Enabling businesses to have confidence • Sustainable gas pricing will be a critical • Assisting with demand growth and to inv
Slide 23: Orica's Climate Change Approach
ORICA’S CLIMATE CHANGE APPROACH ANDREW STEWART CHIEF DEVELOPMENT AND SUSTAINABILITY OFFICER 2023 SUSTAINABILITY INVESTOR DAY 20
Slide 24: Sustainability Is the Key Component of Our Strategy
ORICA’S APPROACH TO SUSTAINABILITY SUSTAINABILITY IS THE KEY COMPONENT OF OUR STRATEGY Generate returns ENDURING BUSINESS MODEL Stay relevant Meet with our society’s customers expectations 2023 SUSTAINABILITY INVESTOR DAY 21
Slide 25: Orica's Climate Change Journey
ORICA’S CLIMATE CHANGE APPROACH ORICA’S CLIMATE CHANGE JOURNEY Pre-FY2020 FY2020 FY2021 FY2022 FY2023+ DECARBONISING ORICA • Established climate change policy CREATING COMMERCIAL ADVANTAGE • Set net zero ambition by 2050 and interim targets • Adopted TCFD recommendations • Invested in Mineral Carbon
Slide 26: Our Decarbonisation Pathway
OUR DECARBONISATION PATHWAY OPERATIONS VALUE CHAIN Decarbonisation Nitrous Oxide Renewable Fuel & Feedstock Sourcing & Technological Decarbonised Carbon levers Abatement Energy & Switching / CCUS Supply Mix Advancements Explosives Offsetting Optimisation for Chemical Feedstocks BASE YEAR1 13% GHG 3%
Slide 27: Demonstrating Progress Towards Net Zero Ambition
DEMONSTRATING PROGRESS TOWARDS NET ZERO AMBITION OPERATIONS VALUE CHAIN Decarbonisation Nitrous Renewable Fuel & Feedstock Sourcing & Technological Decarbonised Carbon levers Oxide Energy & Switching / CCUS Supply Mix Advancements for Explosives Offsetting Abatement Optimisation Chemical Feedstocks
Slide 28: Significant Progress in Reducing Operational Emissions (Scope 1 and 2)
ORICA’S CLIMATE CHANGE APPROACH SIGNIFICANT PROGRESS IN REDUCING OPERATIONAL Accelerated target EMISSIONS (SCOPE 1 AND 2) to reduce net operational emissions by Orica’s gross operational decarbonisation trajectory At least Scope 2 Gross operational emissions2 45% by 20301 from 2019 levels Carbon cre
Slide 29: Taking a Further Step to Tackle Climate Change (Scope 3)
ORICA’S VALUE CHAIN EMISSIONS (SCOPE 3) TAKING A FURTHER Ambition to achieve STEP TO TACKLE 25% CLIMATE CHANGE reduction in Scope 3 emissions by 2035 from 2022 baseline1,2 Orica’s global GHG emissions by source • Challenges exist in addressing Scope 3 emissions • Success will require transparency an
Slide 30: Transparency, Accountability and Recognition
ORICA’S CLIMATE CHANGE APPROACH TRANSPARENCY, ACCOUNTABILITY AND RECOGNITION COMMITMENT TO TRANSPARENCY AND ACCOUNTABILITY ESG data centre hosting performance Converted data and public disclosures $1.3b of existing bank debt facilities to sustainability- linked loans EXTERNAL RECOGNITION ‘AAA’ RATIN
Slide 31: Decarbonising Orica: Solutions – Scope 1 & 2
DECARBONISING ORICA SOLUTIONS – SCOPE 1 & 2 BERTUS DE VILLIERS VICE PRESIDENT – CONTINUOUS MANUFACTURING 2023 SUSTAINABILITY INVESTOR DAY 28 Kooragang Island, Australia
Slide 32: Decarbonising Our Continuous Manufacturing Plants
DEMONSTRABLE PROGRESS TOWARDS REDUCING OPERATIONAL EMISSIONS 1 CARSELAND 2 KOORAGANG ISLAND DECARBONISING OUR • Tertiary catalyst installed NAP1 November • Tertiary catalyst installed on NAP1-3 in July CONTINUOUS 2021 2023 • Secondary catalyst in operation on NAP2 • Hunter Valley Hydrogen Hub with O
Slide 33: Renewable Electricity Across Our Operations
PROGRESS IN REDUCING SCOPE 2 EMISSIONS Roadmap to 100% renewable electricity RENEWABLE ELECTRICITY Renewable electricity % ACROSS OUR OPERATIONS Offsite generation underway Onsite generation • 100% renewable electricity at • 500kW system installed in Gomia, Kooragang Island India since 2015 – 10-yea
Slide 34: Carbon Market and Offsets
DECARBONISING ORICA CARBON MARKET AND OFFSETS TROY POWELL HEAD OF SUSTAINABILITY 2023 SUSTAINABILITY INVESTOR DAY 31
Slide 35: Orica's Carbon Market Positioning
CARBON MARKET FRAMEWORK ORICA’S CARBON MARKET POSITIONING ORICA’S PARTICIPATION IN CARBON MARKETS TO MEET OBLIGATIONS AND RETAIN FLEXIBILITY AND OPTIONALITY COMPLIANCE CARBON MARKET VOLUNTARY CARBON MARKET Mandatory price on emissions for covered entities Financial incentive for avoiding or removing
Slide 36: Mandatory Emissions Trading Schemes in Australia and Canada
CARBON MARKETS ORICA IS SUBJECT TO MANDATORY EMISSIONS TRADING SCHEMES IN AUSTRALIA AND CANADA AUSTRALIA ALBERTA, CANADA Emissions Trading Scheme (ETS) Safeguard Mechanism1 TIER market2 Carbon market size - 2023 AUD $0.3bn AUD $1.5bn Current market view Currently oversupplied but expected to move Ma
Slide 37: Orica Is Uniquely Positioned to Meet Obligations
REGULATION & EMISSIONS TRADING SCHEMES ORICA IS UNIQUELY POSITIONED TO MEET OBLIGATIONS Schematic for Australian market, Schematic for Alberta compliance indicative position mechanism, indicative position Historical baseline Emissions (MtCO2-e) Emissions (MtCO2-e) ACCUs deemed surrender to Governmen
Slide 38: The Role of Carbon Offsets
CARBON MARKET FRAMEWORK THE ROLE OF Orica’s emission reduction hierarchy CARBON OFFSETS Avoid and reduce Prioritise reducing own emissions at lowest cost Our principles in applying offsets • Prioritise own emissions reduction • Transparency and integrity Position • Certified to a reputable standard
Slide 39: Q&A Session
Q&A SESSION 2023 SUSTAINABILITY INVESTOR DAY 36
Slide 40: Creating Commercial Advantage: Renewable Hydrogen
CREATING COMMERCIAL ADVANTAGE RENEWABLE HYDROGEN ANDREW STEWART CHIEF DEVELOPMENT AND SUSTAINABILITY OFFICER 2023 SUSTAINABILITY INVESTOR DAY 37 Kooragang Island, Australia
Slide 41: Highlights of Our Recent Partnerships
HIGHLIGHTS OF OUR RECENT PARTNERSHIPS PARTNERING FOR PROGRESS RESEARCH AND GOVERNMENT INDUSTRY PARTNERSHIPS PARTNERSHIPS 2023 SUSTAINABILITY INVESTOR DAY 38
Slide 42: Hunter Valley Hydrogen Hub
HUNTER VALLEY HYDROGEN HUB COMPELLING ADVANTAGES AND STRONG PARTNERS 1.6 GW RENEWABLE HYDROGEN AMBITION - PHASE 1: 50 MW RENEWABLE HYDROGEN FACILITY - ORICA’S 350K TPA AMMONIA PLANT - 2023 SUSTAINABILITY INVESTOR DAY 39
Slide 43: Production Credits Critical to Establish a Renewable Hydrogen Market
RENEWABLE HYDROGEN PRODUCTION Ammonia manufacturing cost comparison based on H2 source CREDITS CRITICAL TO ESTABLISH A % OpEx cost difference in 2025 MARKET Providing optionality • Low Carbon AN can be produced from Low Carbon -50% Ammonia -49% • Low Carbon Ammonia can be exported to new global cust
Slide 44: Creating Commercial Advantage: ESG Oriented Investments
CREATING COMMERCIAL ADVANTAGE ESG ORIENTED INVESTMENTS ANDREW STEWART CHIEF DEVELOPMENT AND SUSTAINABILITY OFFICER 2023 SUSTAINABILITY INVESTOR DAY 41
Slide 45: Supporting MCi Carbon
CREATING VALUE FROM WASTE SUPPORTING MCi CARBON • Orica has supported MCi Carbon1 with research funding and expertise • MCi Carbon demonstration plant will be at our site in Kooragang Island • The demonstration plant will be one of the world’s largest carbon capture and utilisation plants • Schedule
Slide 46: Partnering with Alpha HPA
CREATING VALUE FROM WASTE PARTNERING WITH ALPHA HPA Reagents to purify raw materials Orica’s position The by-product of our operations can be used to advance technology • Orica acquired a 5% equity interest in Alpha HPA1 in November 2022 • Signed a MoU to investigate the HPA First Project, Gladstone
Slide 47: Orica's Sustainable Solutions
Ask Andrew for a digital centric photo CREATING COMMERCIAL ADVANTAGE ORICA’S SUSTAINABLE SOLUTIONS ANGUS MELBOURNE CHIEF TECHNOLOGY OFFICER 2023 SUSTAINABILITY INVESTOR DAY 44
Slide 48: Smarter Solutions to Improve Safety, Productivity and Sustainability
ESG PROPOSITION SMARTER SOLUTIONS TO IMPROVE SAFETY, PRODUCTIVITY AND SUSTAINABILITY Improve Lower safety emissions Increase Customer productivity licence to and reduce SUPPORTING OUR operate operational CUSTOMERS TO costs OPERATE SAFELY AND SUSTAINABLY Reduce impact Improve on environment recovery
Slide 49: Optimising Energy Across the Value Chain Through Integrated Workflow
ESG PROPOSITION: DIGITAL SOLUTIONS OPTIMISING ENERGY ACROSS THE VALUE CHAIN THROUGH INTEGRATED WORKFLOW DRILL TO BLAST GRADE CONTROL MINE TO MILL • Optimising energy by matching explosives • Maximising ore recovery by modelling ore • Extracting maximum final concentrate with energy to orebody intell
Slide 50: Optimised Blasting
ESG PROPOSITION: BLASTING TECHNOLOGY OPTIMISED BLASTING WEBGEN™ AVATEL™ 4D™ • World’s first fully wireless initiation • World’s first mechanised development • Bulk system delivers explosive energy system charging system for underground mines more precisely and with a wider range of options • Reduces
Slide 51: Protecting the Environment and Utilising Resources More Effectively
ESG PROPOSITION: BLASTING TECHNOLOGY PROTECTING THE ENVIRONMENT AND UTILISING RESOURCES MORE EFFECTIVELY New product, launching soon CYCLO™ FORTIS™ CLEAR & PROTECT EXCEL™ NEO LEAD-FREE LOW-CARBON BULK LOADING SYSTEMS DETONATOR RANGE EMULSIFIER1 • Reusing and reducing • Effectively guarding against •
Slide 52: Governance and Engagement
GOVERNANCE AND ENGAGEMENT JOHN BEEVERS NON-EXECUTIVE DIRECTOR AND CHAIR OF THE SAFETY & SUSTAINABILITY COMMITTEE 2023 SUSTAINABILITY INVESTOR DAY 49
Slide 53: Board's Governance and Oversight
GOVERNANCE AND ENGAGEMENT BOARD’S GOVERNANCE AND OVERSIGHT Climate Change Governance Framework BOARD OF DIRECTORS Strategy, Performance, Risk Management, Culture Safety and Sustainability Committee Board Audit and Risk Committee Innovation and Technology Committee People and Remuneration Committee S
Slide 54: Q&A Session
Q&A SESSION 2023 SUSTAINABILITY INVESTOR DAY 51
Slide 55: Closing Remarks
CLOSING REMARKS SANJEEV GANDHI MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER 2023 SUSTAINABILITY INVESTOR DAY 52
Slide 56: Accelerated Climate Change Targets and Scope 3 Ambition
STRENGTHENING ORICA’S CLIMATE CHANGE COMMITMENTS ORICA’S ACCELERATED CLIMATE CHANGE TARGETS AND SCOPE 3 AMBITION ORICA’S ACCELERATED CLIMATE CHANGE TARGETS AND AMBITION Operational net Scope 1 Renewable Scope 3 and 2 emissions targets electricity ambition New Updated Existing New At least AMBITION 3
Slide 57: Delivering Value to Our Shareholders
OUR INVESTMENT PROPOSITION DELIVERING VALUE TO OUR SHAREHOLDERS OUR PROMISE Operating responsibly together with our people, partners, customers Safety is, and will We are the global We have reshaped remain our number leader in mining and civil our strategy and we one priority construction markets ar
Slide 58: Appendix
APPENDIX 2023 SUSTAINABILITY INVESTOR DAY 55
Slide 59: Further Progress Made on Operational Emissions During FY2023
DEMONSTRABLE PROGRESS TOWARDS REDUCING OPERATIONAL EMISSIONS (SCOPE 1 AND 2) FURTHER PROGRESS MADE ON OPERATIONAL EMISSIONS DURING FY2023 FY2022 global operation GHG emissions by source Progress towards achieving absolute net GHG (Scope 1 and 2) emissions reduction target ktCO2-e -13.7% 4% -30% 11%
Slide 60: Tertiary Abatement Technology
PROGRESS IN REDUCING SCOPE 1 EMISSIONS TERTIARY ABATEMENT TECHNOLOGY CARSELAND, CANADA KOORAGANG ISLAND, AUSTRALIA YARWUN, AUSTRALIA • Technology installed November 2021 • Decarbonisation Project completed July • Yarwun Nitrates Decarbonisation Project through partnership with the Alberta 2023 FID a
Slide 61: Contact: Delphine Cassidy
Contact: Delphine Cassidy Chief Communications Officer M: +61 419 163 467 E: delphine.cassidy@orica.com
Slide 62: Definitions
DEFINITIONS Term Definition Term Definition According to the Intergovernmental Panel on Climate Change, knowledge-base and Hydrogen made via steam methane reforming (SMR) using a methane natural gas Grey hydrogen assessment approaches used to understand the impacts of 1.5°C global warming above feed