Slide 1: Chemnet Restructuring Announcement April 2006
pat _ Qoria CHEMNET Restructuring Announcement April 2006
Slide 2: Why Is Restructuring Necessary
WHY IS RESTRUCTURING NECESSARY ¢ Business will not meet Orica’s internal benchmarks of 18% RONA in 2006 ¢ Business has been impacted by: — slow down in Automotive and Building & Construction markets — issues impacting the integration of the Bronson & Jacobs acquisition * Cost base needs to be resize
Slide 3: What the Restructuring Will Involve
WHAT THE RESTRUCTURING WILL INVOLVE ¢ reduction of headcount ¢ product line rationalisation * warehousing consolidation ¢ rationalisation of manufacturing assets ¢ realignment of Chemnet’s structure for improved focus on customer and principal relationships
Slide 4: Deliver
WHAT THE RESTRUCTURING WILL DELIVER Restructuring and re-focusing will deliver: ¢ alower cost base and more efficient supply chain that will lead to a more competitive Chemnet business * annual cost savings of $20 million ¢ a business that is capable of continually meeting Orica’s 18% RONA hurdle ¢
Slide 5: Employee Cost Savings
EMPLOYEE COST SAVINGS Employee cost savings: ¢ will be approximately $12 million per annum * across all functions and divisions * necessary and possible following the significant acquisition program over past 4 years
Slide 6: Other Fixed Cost Savings
OTHER FIXED COST SAVINGS Other fixed cost savings will come from: ¢ reduced warehousing costs ¢ exiting under performing assets ¢ site rationalisation
Slide 7: Cost
WHAT THE RESTRUCTURING WILL COST A$ millions (before tax) notes Cash Non _ Total Cash Cost Redundancies 10 10 Asset Rationalisation 1 3 30 33 General transition costs 5 5 Total Restructuring costs 2 18 30 48 4 + . + . 7 . Includes warehouse and site rationalisation and product line exit 2 Will be di
Slide 8: Chemnet Post Restructuring
CHEMNET POST RESTRUCTURING ¢ Headcount reduction in excess of 100 employees from 30 September 2005 ¢ More efficient supply chain ¢ Better focus on customers and suppliers ¢ Business capable of delivering sustainable economic profit