Slide 1: FY 2019 Financial Results
FY 2019 Financial Results 12 November 2019 Jeanne Johns Managing Director & Chief Executive Officer 1
Slide 2: Disclaimer
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 intended to be used as the basis f
Slide 3: Table of Contents
Table of Contents FY19 Overview Jeanne Johns Managing Director & Chief Executive Officer Zero Harm Jeanne Johns Managing Director & Chief Executive Officer Group Results & Strategic Highlights Jeanne Johns Managing Director & Chief Executive Officer Operational Review Jeanne Johns Dyno Nobel America
Slide 4: FY19 Overview
FY19 Overview Jeanne Johns Managing Director & Chief Executive Officer
Slide 5: FY19 Overview
FY19 Overview Strong progress on embedding Strategic Drivers despite challenging year Challenging year impacted by non-recurring events Progress on Strategic Agenda ▪ FY19 EBIT of $304m, after $197m of non-recurring ▪ Step change improvement in Total Recordable Injury items Frequency Rate (TRIFR) ⎻
Slide 6: Zero Harm
Zero Harm Continuous improvement in Health, Safety & Environmental measures FY21 Target: FY21 Target: 0.7 Sustainable Improvement 0.95 0.94 42 41 TRIFR 0.80 Potential High 34 0.70 Severity Incidents FY17A FY18A FY19A FY17A FY18A FY19A FY21 Target: FY21 Target: Nil Sustainable 3 Improvement 33 28 Sig
Slide 7: Group Results & Strategic Highlights
Group Results & Strategic Highlights Jeanne Johns Managing Director & Chief Executive Officer 7
Slide 8: IPL Group Result FY19
IPL Group Result FY19 Result impacted by non-recurring items and extreme weather Statutory EBIT of $304m, from $321m in pcp; Statutory NPAT of $152m, from $208m in pcp EBIT of $501m, before non-recurring items, $56m from $557m in pcp Group EBIT Movements EBIT A$’ mill 600 Non-recurring 550 (43) 26 (
Slide 9: Manufacturing Reliability Update
Manufacturing Reliability Update Good progress on steps outlined at the Half Year to address operating issues FY19 Performance Production at Waggaman and Phosphate Hill were in line with FY19 earnings guidance, as updated on 2 September 2019 Status Waggaman Phosphate Hill ▪ Outages in 2H19 caused by
Slide 10: Update on Strategic Review of Fertilisers Business
Update on Strategic Review of Fertilisers Business Strategic review progressing to plan Strategic review announced on 2 September 2019 and work progressing ▪ Various attractive growth opportunities identified under leadership of Stephan Titze ▪ Several options under assessment, including a potential
Slide 11: Operational Review
Operational Review Jeanne Johns Managing Director & Chief Executive Officer 11
Slide 12: Dyno Nobel Americas
Dyno Nobel Americas Continued growth in Explosives earnings despite the weather impact on the market Explosives EBIT, up US$6m despite Statutory FY19 EBIT of US$164m, from US$212m in pcp demand impacts from weather EBIT of A$283m (US$200m), before non-recurring items, 2% vs pcp and underlying coal m
Slide 13: Dyno Nobel Americas - Explosives
Dyno Nobel Americas - Explosives Delivering strong growth despite challenging weather and coal market conditions Good business performance considering unseasonal wet weather and flooding impacting Quarry & Construction (Q&C) and Coal industries ▪ Explosives earnings growing 5% in FY19 to US$136m (or
Slide 14: Dyno Nobel Americas – Explosives
Dyno Nobel Americas – Explosives Delivering double digit growth and increased margins from technology pull through Strong Explosives earnings growth history Explosives - EBIT & Margin Growth ▪ 13% EBIT CAGR* EBIT EBIT Margin U$’ mill % of Revenue ▪ EBIT margin >16%, up from ~13% in FY16 140 18 ▪ Hig
Slide 15: Dyno Nobel Americas – Explosives
Dyno Nobel Americas – Explosives Well positioned to continue above market growth Explosives earnings growth expected to continue, underpinned by strategically located assets and strong technology platform Continue to grow profitable market share ▪ Market share growth across all Explosives sectors in
Slide 16: Dyno Nobel Asia Pacific
Dyno Nobel Asia Pacific FY19 results impacted by contract re-basing, benefits from stronger demand in Western Australia Higher sales volumes to Iron Ore FY19 EBIT of $179m, from $205m in pcp customers driving $6m increase in earnings Dyno Nobel Asia Pacific EBIT Movements Strong 2H19 performance at
Slide 17: Dyno Nobel Asia Pacific
Dyno Nobel Asia Pacific Underlying business strong, short-term performance impacted by contract re-basing Accelerating customer demand for premium technologies driving growth ▪ Strong growth in technology volumes in Western Australia and Bowen Basin ⎻ EDS CAGR* of 64% ⎻ Premium Emulsions CAGR* of 16
Slide 18: Dyno Nobel Asia Pacific
Dyno Nobel Asia Pacific Medium-term earnings upside expected from re-based business Contract renewals underpinned by premium technology ▪ Strategic technology alliance established with large innovating customer in FY19 Strong demand for premium technology driving growth ▪ Progressively rolling out D
Slide 19: Fertilisers Asia Pacific
Fertilisers Asia Pacific Result impacted by non-recurring items and prolonged drought Net $43m impact from higher Statutory FY19 EBIT loss of ($80m), from $105m in pcp Australian East Coast gas cost EBIT of $68m, before non-recurring items Drought conditions across East Fertilisers Asia Pacific EBIT
Slide 20: Fertilisers Asia Pacific
Fertilisers Asia Pacific Clear focus on what can be controlled in FY20 Lower gas cost in FY20, following significant cost increase in FY19 ▪ FY20 full year benefit of $8m from Phosphate Hill gas supply contract that commenced during FY19 ▪ FY20 EBIT benefit of $5m at Gibson Island following new gas
Slide 21: Fertilisers Asia Pacific
Fertilisers Asia Pacific Progress on strategy New products and Precision agriculture ▪ Invested in improving distribution centre dispatch capacity and efficiency, supporting supply chain optimisation and volumes throughput ▪ Expanding capability to manufacture speciality blends and coated fertiliser
Slide 22: Focus on Key Strategic Drivers
Focus on Key Strategic Drivers Jeanne Johns Managing Director & Chief Executive Officer 22
Slide 23: Manufacturing Excellence
Manufacturing Excellence Good progress on Manufacturing Excellence strategy Improving plant reliability Ammonia Reliability – Major Plants ▪ Improved 2H19 reliability and performance across all plants % Reliability ▪ Cheyenne achieved target reliability of 95% in FY19 100 94% 95% ▪ Reliable performa
Slide 24: Strong Growth of Premium Technology
Strong Growth of Premium Technology Continued technology growth across key markets in FY19 Significant growth in Electronic Detonator Systems Electronic Detonator Systems ▪ Accelerating customer demand driving significant (million units sold) technology growth momentum ▪ Significant growth in EDS in
Slide 25: Strong Growth of Premium Technology
Strong Growth of Premium Technology Delta E volume growth and fleet expansion Delta E Technology remains a key market Premium Emulsion (thousand metric tonnes sold) differentiator ▪ Delivers improved operational, safety and 28% 16% +34% +16% environmental outcomes for our customers 300 80 60 ▪ Conti
Slide 26: Leading Technology Solutions
Leading Technology Solutions Long-term Customer Technology Partnerships ▪ Established a joint technology alliance with large mining customer in Australia ▪ Partnering and investing in a five year program to develop technology improvements Nobel FireTM Central Digital Control System ▪ Fully connectin
Slide 27: Profit & Loss, Corporate and Balance Sheet
Profit & Loss, Corporate and Balance Sheet Frank Micallef Chief Financial Officer
Slide 28: Group Profit & Loss / Corporate
Group Profit & Loss / Corporate Corporate & Group Profit & Loss FY19 FY18 A$m A$m Net Borrowing Costs up $16m to $144m Statutory Profit & Loss ▪ Higher average debt levels compared to pcp Revenue 3,918 3,856 ▪ Lower average A$:US$ exchange rate of $0.70 (pcp: $0.76) Statutory EBIT 304 321 ▪ Higher b
Slide 29: Balance Sheet
Balance Sheet Refinancing successfully completed in FY19 Debt Maturity3 A$’mill Bank debt ▪ Extended average tenor of facilities to 5.7 years3 (pcp: 3.2 Capital Markets years) 800 ▪ Increased diversity of funding sources 600 ▪ Lower credit margins on long term debt 400 Investment grade credit rating
Slide 30: Capital Discipline
Capital Discipline Continued focus on expenditure ▪ Remain disciplined as free cash flows expected to improve from FY20 ▪ Value spending on technology, delivering growth opportunities Sustenance expenditure ▪ Sustenance capital expenditure for FY19 of $293m including lease buy-out ▪ FY20 sustenance
Slide 31: Sustainability
Sustainability Jeanne Johns Managing Director & Chief Executive Officer 31
Slide 32: Sustainability
Sustainability Climate change philosophy being integrated into Strategic Drivers Smarter manufacturing ▪ Focused on reducing our carbon footprint and that of our customers ▪ Local manufacturing results in lowest carbon footprint ▪ Investment in equipment that reduces environmental impact Leading tec
Slide 33: Outlook – FY20
Outlook – FY20 Jeanne Johns Managing Director & Chief Executive Officer 33
Slide 34: Outlook – FY20
Outlook – FY20 Dyno Nobel Americas Dyno Nobel Asia Pacific Fertilisers Asia Pacific Corporate SCI Explosives ▪ Premium technology sales are ▪ Corporate costs expected at Continued earnings growth expected to increase, with ▪ Phosphate Hill expected to ~$30m expected, underpinned by expansion activit
Slide 35: Strategic Priorities – FY20
Strategic Priorities – FY20 Jeanne Johns Managing Director & Chief Executive Officer 35
Slide 36: Strategic Priorities – FY20
Strategic Priorities – FY20 Year-on-year improvement across our Zero Harm balanced scorecard Continued implementation of Manufacturing Excellence strategy, focus on plant reliability Maintain growth in Dyno Nobel Americas, leveraging strategically located assets and strong technology platform Levera
Slide 37: Questions & Answers
Incitec Pivot Limited DYNO Dyno Nobel INNOVATION ON THE GROUND Questions & Answers
Slide 38: Appendix
Incitec Pivot Limited DYNO Dyno Nobel INNOVATION ON THE GROUND Appendix
Slide 39: Debt Maturities & Net Debt Reconciliation
Debt Maturities & Net Debt Reconciliation Debt Maturities* – 30 September 2019 Gross to Net Debt Reconciliation A$’ mill 30 September 2019 $’mill 1,500 Facilities Limit Total gross debt (A$ mill) 2,626 Drawn Funds 1,200 Fair value and other adjustments (7) Loans to JVs, associates / other short term
Slide 40: FY19 Manufacturing Impacts
FY19 Manufacturing Impacts FY19 Group EBIT – Manufacturing Impacts, excluding Non-recurring items A$’ mill 40 Turnarounds Reliability 4 30 (8) 20 30 (21) 10 (3) 2 0 Phosphate Hill Cheyenne/St Helens Gibson Island WALA Reliability (excl Moranbah Total FY19 EBIT Impact FY18 Turnaround Performance/FY18