Slide 1: Full Year Results Announcement
& ORICA Full Year Results Announcement 21 November 2005
Slide 2: Presentation - Outline
Presentation - Outline : . « Results for the year - ended 30 sate 2005 + Strategy — / "Graeme Liebelt - - Business Performance | _. Cashflow — _ _- Financial Position |. “Noel Meehan | _ Rights bee . Sec 2006 "Graeme | Liebelt —
Slide 3: Financial Summary
Year Ended 30 September FINANCIAL SUMMARY 2005 2004 % Change Underlying Results: Sales Revenue asm 5,127 4,610 11 NPAT (excluding significant items) asm 335 326 3 EBIT (excluding significant items) asm —so5/7 553 4 Results including significant items: Significant items after tax asm = (99) 2 NPAT in
Slide 4: Significant Items
Year Ended 30 September SIGNIFICANT ITEMS (A$M) Qenos Divestment related costs Legacy Issues Botany groundwater provision Surplus property sales Restructuring and Rationalisation Mining Services -restructuring -asset impairment Fertilisers Corporate Chemical Services Taxation Sale and leaseback refu
Slide 5: Financial Summary
Year Ended 30 September FINANCIAL SUMMARY 2005 2004 % Change Results (before significant items) Earnings per share cents 122.7 119.0 3 Return on shareholders' funds % 23.2 23.1 Results (after significant items) Earnings per share cents 86.6 119.8 (28) Return on shareholders’ funds % 16.4 23.3 (30) R
Slide 6: Orica's Approach — Value Drivers: Strategy
Orica’s Approach — Value Drivers STRATEGY
Slide 7: Orica's Strategy
Orica’s Strategy ¢ Principles - Market leadership - Earning the “Right to Grow” - Growing “Close to the Core” ¢ Progress to date ¢ Future direction ABOVE AVERAGE RETURN TO SHAREHOLDERS
Slide 8: Cost Productivity
Year Ended 30 September COST PRODUCTIVITY 2005 2004 Increase $M $M $M % Sales revenue 5,127 4,611 516 11.2 Variable costs 3,151 2,717 434 16.0 Gross margin 1,976 1,894 82 4.3 Gross marginlsales 38.5% 41.1% Cash fixed costs 1,293 1,230 63 5.1 Depn and amortisation 176 171 5 2.9 Total Costs 4,620 4,11
Slide 9: Capital Productivity
Year Ended 30 September CAPITAL PRODUCTIVITY 2005 2004 2003 Disciplined Capital Management TWC / Sales % 11.9% 16.6% 16.9% Inventory Turns (times) 3.8x 3.6x 3.9x Sustenance as % of Depreciation 104.6% 106.2% 55.0% Major Plant Capacity Yarwun AN 295 ktpa 275 ktpa 240 ktpa Yarwun Sodium Cyanide 60 ktp
Slide 10: Orica — Our Culture
ORICA — Our Culture - SH&E - Commercial Ownership — Group Procurement — Supply Chain Improvement — Manufacturing Efficiency - Creative Customer Solutions — Customer Driven — Technology - Working Together -DELIVER THE PROMISE 10
Slide 11: Business Performance, Cash Flow, Financial Position
eee Performance — Cash F low _ oe inanci cial Po 0sI ition.
Slide 12: Financial Results - NPAT
Year Ended 30 September FINANCIAL RESULTS - NPAT 2005: Sales $5.1B, NPAT* $335M 400 350 300 250 NPAT (ASM) 01 02 03 04 05 25% r 20% r 15% r 10% | 5% 0% ROSHF ____ CONTINUOUS IMPROVEMENT * pre significant items/abnormals 12
Slide 13: EBIT Performance of Existing Businesses
EBIT* Performance of Existing Businesses Past Performance Orica Today ASM 700 - 600 + 500 + 400 - 300 4 200 + 100 + 04 = = A 6 @ SO d& DM oo oo © G2 KL GB CO GOB RA DDe © D DW GD DM QD QD DM DM DM HM LH DA BD NHN AL LN’ LM AN LH FF HF PP HGF HF PF HF HF HF HF FOC Ge Sf fs LESS CYCLICAL, HIGHER BASE
Slide 14: NPAT Analysis
Year Ended 30 September NPAT ANALYSIS ASM 400 5 390 5 7 380 4 7 na Co i 370 4 Ey 360 - “a [4 (22) 350 48 _ | 340 4 a2) MM Lo 335 3307 326 6) {2) 3207 3107 300 ~ NPAT Existing Nth Acqn’s Sale & Parafield Other Growth Interest Goodwill Yates NPAT FY04 Businesses America Leaseback spend FYOS ¥ EBIT gro
Slide 15: Mining Services
Mining Services Sales $1,987M; EBIT $334M; Average Net Assets $1,128M; RONA 30% 400 18 $ ASM 350 4 16 300 4 450 122 4 = 250 | 3 400 51 = ee 10 x = 200 8 3 72 © 150 J = 350 mee 334 & 6 & © 8 @ 100 + rn) 4 300 } 979 50 2 - 0 0 250 2002 2003 2004 2005 200 — me Ne NA See yawn x oR =a FYO4 Mi Vol, Restru
Slide 16: Fertilisers
Fertilisers Sales $1,074M; EBIT $72M; Average Net Assets $638M; RONA 11% 120 10 100 9 8 80 7 8 z % 60 ° 2 < 5 E 40 4 = ao bE a a 20 3 ow 2 i} t tT 1 1 20 2002 2003 2004 2005 0 | ma firsthalfebit (74 second halfebit __ EBIT MARGIN | ASM 1404 7 8. 1204 2 F] 104 100 (27) 801 (14) (10) Hi 72 om 60~ Epit
Slide 17: Consumer Products
Consumer Products Sales $769M; EBIT $97M; Average Net Assets $215M; RONA 45% 120 “4 100 143 = 80 < < 60 12 Fi] 40 1 20 0 . , , 110 2002 2003 2004 2005 | mm firsthalfebit 1 second halfebit __ egit MARGIN | EBIT MARGIN % 1004 905 80~ 100 (7) (3) (3) EBIT Efficiency Volume Yates FY04 Net Price/Mix Othe
Slide 18: Chemnet
Chemnet Sales $1,029M; EBIT $69M; Average Net Assets $389M; RONA 18% o 70} ae 4) Ti 69 EBIT MARGIN % ~ a ios] CAN wWEADNDOS $40 < 30 fa) 20 65) 63 is} T T r 2002 2003 2004 2005 2 EBIT Acqn's Volume Other Net price EBIT mm first half ebit. [1 second halfebit __ EBit MARGIN FYO4 FYOS v Record full yea
Slide 19: Chemical Services
Chemical Services Sales $412M; EBIT $61M; Average Net Assets $381M; RONA 18%* EBIT ASM 20 2002 2003 2004 2005 17 16 15 14 13 12 mam firsthalfebit (4 second half ebit —— EBIT MARGIN EBIT MARGIN % ASM 70 65 60 55 50 45 40 51 EBIT NetPrice Sale& Acgn’s Miex Restructure Other FY04 L'back EBIT FYOS ¥ Rec
Slide 20: Corporate Centre and Other Support Services
Corporate Centre and Other Support Services (A$M) 2005 2004 _$ Change Corporate Centre (28.4) (26.8) (1.6) Other Support Costs (27.0) (7.3) (19.7) (55.4) (34.1) (21.3) Corporate Centre Growth & Productivity Costs $M Supply Chain 9 x Increased salary costs Customer Focus 5 . Global Procurement/Sourci
Slide 21: Cashflow
Year Ended 30 September CASHFLOW A$M 2005 2004 Change EBITDA 753-724 29 Net interest paid (82) (58) (24) Net tax paid (209) (45) (164) Trade working capital Non-trade working capital Net operating cash flows Net investing cash flows Net financing cash flows Total Cash Flows 167 (15 182 ) (253) (18)
Slide 22: Balance Sheet (A$M)
BALANCE SHEET (A$M) Sept March Sept 2005 2005 2004 Trade working capital 613 949 767 Net property, plant & equipment 1,651 1,567 1,518 Net other assets 501 557 330 Net debt (1,112) (1,441) (977) Net Assets 1,653 1,632 1,638 Orica shareholders’ equity 1,460 1,434 1,429 Outside equity interests 193 19
Slide 23: Net Debt, Gearing and Interest Cover
Net Debt, Gearing and Interest Cover 1600 - 50% Target gearing range L 459% 1400 + shaded ° 1200 ee oe lO I { 40% = b 35% < ge (1000 ee eee | 30% 2 S800 | 25% © 3 oO = 600 + 20% © 400 p 18% + 10% 200 + 5% 0 0% HY02 FY02 HY03 FY03 HY04 FY04 HY05 FYO5 e Gearing 40.2% Interest cover 5.6 times. Target >
Slide 24: Conclusion
Conclusion ¢ Profit improvement ¢ Net Debt and Working Capital improvement on 2005 half year ¢ Progress dealing with legacy issues — Qenos — Botany Groundwater Remediation 24
Slide 25: A-IFRS Impact
A-IFRS Impact A-IFRS adoption from 1 October 2005 Key changes and impact identified and reported - Reduction in shareholder’s equity 30 September 2005 of $121.5M - Key impact on net profit; no goodwill amortisation offset by recognition of employee share based payments. A-IFRS is likely to result in
Slide 26: Rights Issue
Rights Issue: ~ $512M renounceable 1 right offered for every 8 shares held at 7.00 pm (AEDT) on Tuesday 29 November 2005 Issue Price of $15 per share — 25% discount to Theoretical Ex-Rights Price — 27% discount to adjusted closing price on Friday 18 November 2005 (excludes the value of the final div
Slide 27: Summary
Summary - Net profit after tax up 3% — Strong revenue growth — Significant investment in growth and productivity initiatives — Increased dividends for shareholders ¢ Ability to recover input costs ¢ Results demonstrates resilience of earnings 27
Slide 28: Outlook - 2006
Outlook - 2006 Earnings should continue to grow, subject to seasonal conditions in the agricultural sector and the global economic environment. 28
Slide 29: Questions and Answers
Slide 30: Full Year Results Announcement
& ORICA Full Year Results Announcement 21 November 2005
Slide 31: Supplementary Information
Slide 32: Rights Issue - Indicative Timetable
Rights Issue - INDICATIVE TIMETABLE NOaR WN > 11. Lodgement of prospectus with ASIC Rights trading commences Final Dividend and Rights Ex Date Record date for rights entitlements Prospectus sent to shareholders Rights trading ends Closing for acceptances and payment Bookbuild of under subscriptions
Slide 33: A-IFRS: Impact on Net Profit
A-IFRS: Impact on Net Profit 2005 A$M Normal Significant Items AGAAP Net profit after tax 334.9 (98.6) Discontinuation of amortisation of goodwill 36.2 Recognition of employee based share based payments (11.6) Minority interests adjustment (0.8) Taxation (16.0) Adjustment for impairment losses -| (2
Slide 34: A-IFRS: Impact on Shareholders' Equity
A-IFRS: Impact on Shareholders’ Equity 2005 (A$M) AGAAP Shareholder’s Equity 1653.1 Defined Benefit Plan (net of tax) (50.9) Recognition of employee share based payments (45.1) Write Back of goodwill amortisation 36.2 Impairment of assets including goodwill (net of (53.3) tax) Derecognition of Acqui
Slide 35: Foreign Currency - Snapshot
FOREIGN CURRENCY- Snapshot A$ Call Options: Hedging of USD Exposure (as at 30 September 2005) Offshore Business Manufactured Hedge Sales Nitrogen Product | | Premium Year | Cover Strike Cover Strike expense ASM Rate A$M Rate A$M 2006 54 67 cents 73 68 cents 5 2007 35 68 cents 44 68 cents 3 2008 16 6
Slide 36: Foreign Currency - Sensitivity
FOREIGN CURRENCY- Sensitivity Every one cent movement in the exchange rate will impact EBIT: 2006 +/- $1M to $1.5M 2007 +/- $1.5M to $2.0M 2008 +/- $2.0M to $2.5M ACTIVE RISK MANAGEMENT 36