Slide 1: Results Presentation
Results Presentation Financial Year ended 30 September 2018 ASX: IPL US ADR: INCZY
Slide 2: Disclaimer
Financial Year 2018 Review Disclaimer This presentation has been prepared by Incitec Pivot Limited (“IPL”). The information contained in this presentation is for information purposes only. The information contained in this presentation is not investment or financial product advice and is not intende
Slide 3: Welcome and Introduction
Welcome and Introduction Financial Year ended 30 September 2018 Jeanne Johns Managing Director & Chief Executive Officer
Slide 4: Overview
Financial Year 2018 Review Overview 1 Financial Year Review Jeanne Johns Zero Harm Managing Director & Chief Executive Officer Results Overview 2 Group Financial Results Frank Micallef Financial Year 2018 Overview Chief Financial Officer Balance Sheet and Capital Management Corporate and Group 3 Ope
Slide 5: Zero Harm
Financial Year 2018 Review Zero Harm Refocussed our strategy for Health, Safety & Environment (HSE) Broadened our HSE strategy, focus on driving output improvements Continuous improvement on broader set of HSE targets: • 30% improvement in TRIFR by 2021 (vs 1H18: 1.02) • Sustainable year-on-year red
Slide 6: Results Overview
Financial Year 2018 Review Results Overview Group EBIT Movements NPAT: $207.9m, down $110.8m (including IMIs of $139.5m) A$ million Strong result in FY18 with improved outlook NPAT excluding IMIs of $347.4m 9.0% vs pcp EBIT excluding IMIs of $556.7m 11.1% vs pcp • Explosives earnings up 9.8% or $33.
Slide 7: FY18 Strategic & Operational Highlights
Financial Year 2018 Review FY18 Strategic & Operational Highlights IPL Value Drivers Strategy delivery on track & building momentum People priorities • Team engagement and collaboration reset • Leadership team refresh, energised and aligned to deliver on strategy Growth opportunities • Leveraging di
Slide 8: Group Financial Results
Group Financial Results Financial Year ended 30 September 2018 Frank Micallef Chief Financial Officer
Slide 9: FY18 Performance Overview
Financial Year 2018 Review FY18 Performance Overview EBIT excluding IMIs of $556.7m, up 11.1% pcp Group movements in EBIT Strong performance in major turnaround year A$ Continued profit growth in explosives million Explosives Fertilisers Waggaman Manufacturing • Results benefited $22.2m from strong
Slide 10: Balance Sheet and Capital Management
Financial Year 2018 Review Balance Sheet and Capital Management Robust Balance Sheet Increased Shareholder Net Debt & Tenor As at 30 September 2018 • Credit metrics well inside target ranges Returns A$Million Available limits Drawn funds 1,200.0 ‒ Net Debt / EBITDA2: 1.6x (pcp: 1.7x) • FY18 dividend
Slide 11: Corporate and Group
Financial Year 2018 Review Corporate and Group Net Borrowing Costs up $19.3m to $128.0m • Impact of higher average US interest rates and cessation of Waggaman capitalised interest • Average interest rate of 5.68% (pcp: 4.69%) Corporate costs up $10.9m to $31.3m • Investment in additional capability
Slide 12: Operational Review
Operational Review Financial Year ended 30 September 2018 Jeanne Johns Managing Director & Chief Executive Officer
Slide 13: Dyno Nobel Americas
Financial Year 2018 Review Dyno Nobel Americas EBIT up 22.2% to US$211.6m Strong growth from high quality market positions EBIT movements US$ million Explosives earnings up US$12.4m, driven by market growth and share gains • Quarry & Construction (Q&C) remains primary growth driver, volumes up 7% •
Slide 14: Waggaman Operations
Financial Year 2018 Review Waggaman Operations Earnings up 50.9%, production at 103% Project overview • Construction completed under budget • Compensation payments received of ~ US$50.7m1 • FY17, 1st year of operations, production at 74% of nameplate capacity FY18 world class performance • Productio
Slide 15: Dyno Nobel Asia Pacific
Financial Year 2018 Review Dyno Nobel Asia Pacific EBIT up 8.7% to $205.4m Well positioned to leverage manufacturing assets EBIT movements A$ million and differentiated technology Earnings up $6.9m from strong volumes growth in Metallurgical Coal sector • Increased demand driven by mining activity i
Slide 16: Asia Pacific Fertilisers
Financial Year 2018 Review Asia Pacific Fertilisers EBIT up 0.7% to $104.6m Strong volumes despite dry weather, global fertiliser EBIT movements A$ million demand firmed pricing Underlying earnings1 up 24.6% excluding one off FY17 asset sales of $20m Global fertilisers prices firmer in FY18, driving
Slide 17: Innovation On The Ground
Innovation On The Ground Jumbo Trucks Differential Energy Generation 4 Electronics in use DigiShot Plus OVER 3 YEARS SINCE LAUNCH 300,000 OF MT PRODUCT FIRED 60 + OVER 2,000 50 + CUSTOMERS WITH TRUCKS IN SERVICE SHOTS FIRED VARYING GROUND HARDNESS TYPES EZShot • Transformation in shock tube Initiati
Slide 18: Innovation On The Ground – the future is here
Innovation On The Ground – the future is here Full Spectrum Integration • Plant Process & Equipment • Bulk Products • Initiation Systems (Electronics, NONEL, Wireless) • Digital • Mining Applications Technology 18
Slide 19: Sustainability
Sustainability Managing Impacts of Climate Change • Completed detailed assessment of the financial risks and opportunities associated with climate change • IPL’s financial resilience assessed against two future climate scenario, being a 2-degree and 4-degree change • IPL’s risk assessment and treatm
Slide 20: FY19 Outlook and Priorities
FY19 Outlook and Priorities Financial Year ended 30 September 2018 Jeanne Johns Managing Director & Chief Executive Officer
Slide 21: FY19 Outlook
Financial Year 2018 Review FY19 Outlook Business well positioned, with strong momentum into FY19 Dyno Nobel Americas Dyno Nobel Asia Pacific Fertilisers Asia Pacific Corporate • Business well positioned in key • Strong demand expected to • Phosphate Hill expected to • Remaining $90m of share growth
Slide 22: FY19 Priorities
FY19 Priorities IPL Value Drivers • Safety remains top priority • Manufacturing Excellence to drive performance improvement ‒ Drive Manufacturing Excellence under new leadership over next 3 years to 2021 ‒ Focus on improvement in reliability and optimising turnaround cycles and execution • Further e
Slide 23: Questions
Questions Financial Year ended 30 September 2018
Slide 24: Appendix
Appendix 1 Financial Year ended 30 September 2018
Slide 25: EBIT Sensitivities
Financial Year 2018 Review EBIT Sensitivities IPL earnings are sensitive to FY18 EBIT Sensitivities external influences Commodity Proxy Index EBIT Sensitivity • Global fertiliser prices and foreign exchange Americas are key factors impacting the Group’s earnings Ammonia1 CFR Tampa +/- US$10/mt = +/-
Slide 26: Gibson Island
Financial Year 2018 Review Gibson Island Arrangements for development Gas supply to Gibson Island of gas tenement finalised Drilling and appraisal works to be Interim gas supply to 31 December completed during calendar 2019, 2019, will increase manufacturing commitment to spend up to $20m costs by ~
Slide 27: Appendix – Commodity Statistics
Appendix 2 – Commodity Statistics Financial Year ended 30 September 2018
Slide 28: US Coal Inventories and Production
Financial Year 2018 Review US Coal Inventories and Production US Electrical Power Coal Inventories - Last 10 Years 250 200 150 145.8 2 100 101.7 50 0 30/09/2008 30/09/2009 30/09/2010 30/09/2011 30/09/2012 30/09/2013 30/09/2014 30/09/2015 30/09/2016 30/09/2017 30/09/2018 US Coal Production - Last 10
Slide 29: US Quarry and Construction Indicators
Financial Year 2018 Review US Quarry and Construction Indicators Crushed Stone US Freight Rail Carloads - Last 10 Years 30000 25000 20804 22966 20000 15000 2 10000 5000 0 30/09/2008 30/09/2009 30/09/2010 30/09/2011 30/09/2012 30/09/2013 30/09/2014 30/09/2015 30/09/2016 30/09/2017 30/09/2018 ISE Engi
Slide 30: US Ammonia Spreads
Financial Year 2018 Review US Ammonia Spreads Henry Hub Natural Gas vs. Ammonia (CFT Tampa) - Last 10 Years 1000 8.00 900 7.438 931 7.00 800 6.00 700 600 5.00 500 400 2 3.008 4.00 3.00 300 200 355 2.00 100 1.00 0 0.00 30/09/2008 30/09/2009 30/09/2010 30/09/2011 30/09/2012 30/09/2013 30/09/2014 30/09
Slide 31: US Ammonia Spreads
Financial Year 2018 Review US Ammonia Spreads Urea (FOB Middle East) vs. Ammonia (CFR Tampa) - Last 10 Years 800 1000 931 900 700 707 800 600 700 500 600 400 2 320 500 300 400 300 200 355 200 100 100 0 0 30/09/2008 30/09/2009 30/09/2010 30/09/2011 30/09/2012 30/09/2013 30/09/2014 30/09/2015 30/09/20
Slide 32: Fertiliser Benchmark Pricing
Financial Year 2018 Review Fertiliser Benchmark Pricing DAP (FOB Tampa) - Last 10 Years 1400 1215 1200 1000 800 2 600 439 400 200 0 30/09/2008 30/09/2009 30/09/2010 30/09/2011 30/09/2012 30/09/2013 30/09/2014 30/09/2015 30/09/2016 30/09/2017 30/09/2018 Urea (FOB Middle East) - Last 10 Years 800 707