Slide 1: Acquisition of Axis and Equity Raising
For personal use only Acquisition of Axis and Equity Raising 3 AUGUST 2022 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA 1 Public
Slide 2: Disclaimer
Disclaimer This investor presentation (Presentation) is dated 3 August 2022 and has been prepared by Orica Limited (ABN 24 004 145 868) (Orica). By attending an investor presentation or briefing, or accepting, accessing or reviewing this Presentation, you acknowledge and agree to the terms set out b
Slide 3: Disclaimer (contd)
Disclaimer (contd) This Presentation is for information purposes only and is not a prospectus, product disclosure statement or other offering document under Australian law or any other law (and will not be lodged with the Australian Securities and Investments Commission (ASIC) or any other foreign r
Slide 4: Disclaimer (contd)
Disclaimer (contd) Past performance For personal use only Past performance, including past share price performance of Orica and pro forma financial information given in this Presentation, is given for illustrative purposes only and should not be relied upon as (and is not) an indication of Orica’s v
Slide 5: Disclaimer (contd)
Disclaimer (contd) Disclaimer For personal use only The Joint Lead Managers are acting as joint lead managers, bookrunners and underwriters to the Placement. A summary of the key terms of the underwriting agreement between Orica and the Joint Lead Managers is provided in Appendix D. The Joint Lead M
Slide 6: Contents
Contents For personal use only 1. Transaction summary 7 2. Strategic rationale 11 3. Axis overview 17 4. Outlook 20 5. Equity Raising overview 22 6. Appendices A. Key risks 28 B. International Offer restrictions 40 C. Glossary 46 D. Underwriting Agreement summary 48 NOT FOR DISTRIBUTION OR RELEASE I
Slide 7: Transaction summary
For personal use only Transaction summary NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA 7 Public
Slide 8: Acquisition of Axis augments Orica's end to end, mine to mill offering
TRANSACTION OVERVIEW Acquisition of Axis augments Orica’s end to end, mine to mill offering For personal use only • Orica (ASX: ORI) has entered into a binding agreement to acquire 100% of the entities that own Axis Mining Technology (Axis) (the Acquisition) for A$260 million in cash (Upfront Consid
Slide 9: Enhancing and accelerating Orica's Digital Solutions strategy
ORICA’S REFRESHED STRATEGY Enhancing and accelerating Orica’s Digital Solutions strategy For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA 9 Public
Slide 10: Growing the Digital Solutions vertical
GROWING THE DIGITAL SOLUTIONS VERTICAL Proven track record of organic and inorganic growth to strengthen Orica’s Digital Solutions platform For personal use only 2018 2019 2020 2021 2022 Metals Coal Insights Build Buy NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA 10 Public
Slide 11: Strategic rationale
For personal use only Strategic rationale NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA 11 Public
Slide 12: Axis targets attractive long term industry trends driving demand for Orebody Intelligence
STRATEGIC RATIONALE Axis targets attractive long term industry trends driving demand for Orebody Intelligence products For personal use only Key demand drivers Implication for Axis Raw material supply Mining sector will be at the core of enabling delivery of net zero emissions targets and energy Con
Slide 13: Combination of Axis' technology and Orica's global network is strategically compelling
STRATEGIC RATIONALE The combination of Axis’ digital technology solutions and Orica’s global network and capabilities is strategically compelling For personal use only • The acquisition of Axis will enable Orica to establish a leading, full-service Orebody Intelligence offering, comprising: Enables
Slide 14: Axis enables a leading, full service and differentiated Orebody Intelligence business
STRATEGIC RATIONALE Acquisition of Axis enables Orica to create a leading, full service and differentiated Orebody Intelligence business For personal use only Real-time geomechanical rock properties DOWNSTREAM Drill pipe telemetry OREBODY BLAST DESIGN MEASUREMENT & INTELLIGENCE & EXECUTION OPTIMISAT
Slide 15: Axis enhances Orica's Digital Solutions platform
STRATEGIC RATIONALE Axis enhances Orica’s Digital Solutions platform, providing upstream geospatial information For personal use only Positioning Orica to become the industry’s first integrated, end-to-end, mine to mill solutions provider RESOURCE DEFINITION, PLANNING, DESIGN, MODEL & BLASTING MEASU
Slide 16: Axis enhances Orica's capabilities across the mining value chain
STRATEGIC RATIONALE Axis enhances Orica’s capabilities across the mining value chain, strengthening its market position and customer proposition For personal use only Geo-physics Logging while Geo-physics Geo-physics Plan, design Measurement Geo-spatial (Resource drilling Blasting Ore processing (Ex
Slide 17: Axis overview
For personal use only Axis overview NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA 17 Public
Slide 18: Scalable, high growth, high margin business with diversified global revenue
AXIS BUSINESS OVERVIEW Scalable, high growth, high margin business with diversified global revenue contribution For personal use only • Axis provides specialised navigation instrumentation, data and drilling solutions for Axis Revenue2 Financial Highlights the mining industry Technology • Focused on
Slide 19: Axis product portfolio
AXIS PRODUCT PORTFOLIO Comprehensive suite of geospatial tools and instruments to accurately determine location and orientation of drill holes and For personal use only collection samples Geospatial Tools Deployment Accessories Data Management Core Rig Cloud Drill Gyro / EMS1 Overshot Orientation Al
Slide 20: Outlook
For personal use only Outlook NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA 20 Public
Slide 21: 2022 full year earnings outlook remains unchanged
OUTLOOK 2022 full year earnings outlook remains unchanged For personal use only The earnings outlook for the 2022 financial year remains unchanged from the 2022 half year results announcement: • Momentum in EBIT from the ongoing businesses is expected to continue in the second half. There will be no
Slide 22: Equity Raising overview
For personal use only Equity Raising overview NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA 22 Public
Slide 23: Institutional Placement and Share Purchase Plan
EQUITY RAISING OVERVIEW Institutional Placement and Share Purchase Plan For personal use only Placement size and • Fully underwritten institutional placement to eligible institutional investors to raise approximately A$650 million structure • Approximately 40.6 million New Shares to be issued, equiv
Slide 24: Sources and uses of funds
EQUITY RAISING OVERVIEW Sources and uses of funds1 For personal use only Sources A$m Uses A$m Rationale • Axis acquisition price comprises: Gross proceeds from Acquisition Upfront ‒ Upfront Consideration of A$ 260 million; $650m $260m Placement Consideration and Maximum Earn-Out payment ‒ deferred E
Slide 25: Trade working capital requirements
TRADE WORKING CAPITAL REQUIREMENTS Global supply chain dislocations necessitating incremental trade working capital funding in the medium-term For personal use only Driving an increased trade working Trade working capital impacted by capital balance in the medium-term ongoing supply chain dislocatio
Slide 26: Pro forma Balance Sheet
EQUITY RAISING OVERVIEW Pro forma Balance Sheet For personal use only Pro forma combined Orica Axis A$ million (Post IFRS 16) Placement1 group as at 31 March as at 31 March 2022 Acquisition2,3 2022 Cash & cash equivalents 494.1 638.9 (266.5) 866.6 Plant & Equipment 2,897.2 - 3.5 2,900.7 Goodwill 860
Slide 27: Placement and Share Purchase Plan timetable
EQUITY RAISING OVERVIEW Placement and Share Purchase Plan timetable For personal use only Description Date1 7.00pm (AEST) Record date for SPP 2 August 2022 Trading halt and announcement of Acquisition, Placement and SPP 3 August 2022 Placement bookbuild 3 August 2022 Trading halt lifted – trading re
Slide 28: Key risks
For personal use only Key risks NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA 28 Public
Slide 29: Key risks
APPENDIX A Key risks For personal use only Overview This section discusses some of the key risks associated with any investment in Orica, which may affect the value of Orica shares. The risks set out below are not necessarily listed in order of importance and do not constitute an exhaustive list of
Slide 30: Key risks (contd)
APPENDIX A Key risks (contd) For personal use only Completion of the acquisition of Axis is conditional on certain matters including: (a) change of control consents in relation to a number of property leases being received, (b) key members of Axis management entering into employment agreements with
Slide 31: Key risks (contd)
APPENDIX A Key risks (contd) For personal use only Some of Axis’ key supplier and customer arrangements are not governed by binding written agreements. Where no binding written agreement exists, these arrangements Arrangement with Axis’ key may be terminated or varied by the supplier or customer on
Slide 32: Key risks (contd)
APPENDIX A Key risks (contd) For personal use only Risks relating to Orica and its business While the risks set out in this section are stated to relate to Orica and its business, investors should consider that some or all of these risks will also apply to Axis and its business, which Orica will own
Slide 33: Key risks (contd)
APPENDIX A Key risks (contd) For personal use only Orica is subject to a broad range of environmental laws, regulations and standards in each of the jurisdictions it operates, including those that impose limitations on the discharge of pollutants and contaminants to the air, ground, water bodies and
Slide 34: Key risks (contd)
APPENDIX A Key risks (contd) For personal use only Orica is exposed to a range of risks presented by the evolving impacts of climate change on its business including the following: • Increased frequency and/or intensity of extreme weather events (e.g. cyclones, floods, bushfires, etc.) have the pote
Slide 35: Key risks (contd)
APPENDIX A Key risks (contd) For personal use only Any adverse change in Orica’s ability to procure raw materials (in particular gas, ammonia and ammonium nitrate) required to manufacture its products, a material increase in the cost of raw materials or any increase in indirect production input cost
Slide 36: Key risks (contd)
APPENDIX A Key risks (contd) For personal use only Orica has a number of manufacturing operations that supply key products globally. Plant operations may be interrupted, or the supply chain disrupted, for a sustained period Orica’s operations may be due to a number of reasons including machinery or
Slide 37: Key risks (contd)
APPENDIX A Key risks (contd) For personal use only Orica relies on IT software and technology service providers to support its business operations, including its manufacturing operations. Orica also holds sensitive employee and Orica may experience loss of customer data, including such individuals’
Slide 38: Key risks (contd)
APPENDIX A Key risks (contd) For personal use only Demand for Orica’s services depends to a large extent on the level of production activity of Orica’s customers, which are predominantly in the mining and infrastructure industries. Orica’s financial performance will continue to be sensitive to the l
Slide 39: Key risks (contd)
APPENDIX A Key risks (contd) For personal use only General investment risks There are general risks associated with investments in equity capital such as Orica shares. The trading price of Orica shares may fluctuate with movements in equity capital markets in Australia and internationally. This may
Slide 40: International Offer restrictions
For personal use only International Offer restrictions NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA 40 Public
Slide 41: International Offer restrictions
APPENDIX B International Offer restrictions For personal use only This document does not constitute an offer of new fully paid ordinary shares of Orica (New Shares) in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Share
Slide 42: International Offer restrictions (contd)
APPENDIX B International Offer restrictions (contd) For personal use only Statutory rights of action for damages and rescission. Securities legislation in certain Provinces may provide a purchaser with remedies for rescission or damages if an offering memorandum contains a misrepresentation, provide
Slide 43: International Offer restrictions (contd)
APPENDIX B International Offer restrictions (contd) For personal use only Israel TheNew Shares have notbeen registered, and no prospectuswill be issued, underthe Israeli Securities Law, 1968 (the Securities Law). Accordingly, theNew Shares will onlybe offered and sold in Israel pursuantto private pl
Slide 44: International Offer restrictions (contd)
APPENDIX B International Offer restrictions (contd) For personal use only Norway This document has not been approved by, or registered with, any Norwegian securities regulator under the Norwegian Securities Trading Act of 29 June 2007 no. 75. Accordingly, this document shall not be deemed to constit
Slide 45: International Offer restrictions (contd)
APPENDIX B International Offer restrictions (contd) For personal use only United Arab Emirates This document does not constitute a public offer of securities in the United Arab Emirates and the New Shares may not be offered or sold, directly or indirectly, to the public in the UAE. Neither this docu
Slide 46: Glossary
For personal use only Glossary NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA 46 Public
Slide 47: Glossary of terms
APPENDIX C Glossary of terms Term Definition Term Definition For personal use only A$ Australian dollar IFRS International Financial Reporting Standard AAS Australian Accounting Standards Total interest bearing liabilities less cash and cash equivalents, Net debt Acquisition Orica’s proposed acquisi
Slide 48: Underwriting Agreement summary
For personal use only Underwriting Agreement summary NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA 48 Public
Slide 49: Underwriting Agreement summary
APPENDIX D Underwriting Agreement summary For personal use only • Orica has entered into an underwriting agreement with the Joint Lead Managers in respect of the Placement (Underwriting Agreement). The Underwriting Agreement contains representations and warranties and indemnities in favour of the Jo
Slide 50: Underwriting Agreement summary (contd)
APPENDIX D Underwriting Agreement summary (contd) For personal use only c) a condition precedent in the Underwriting Agreement is not satisfied or waived by the Joint Lead Managers by its applicable deadline; d) any event specified in the timetable for the Placement is delayed for more than 24 hours