Orica Limited · ASX:ORI
Orica — Securities Institute presentation (July 2003)
12 slides from Orica's conference presentation, Jul 14, 2003
Slide 1: Securities Institute Presentation by Malcolm Broomhead
Securities Institute Presentation by Malcolm Broomhead, CEO & Managing Director, Orica 14 July, 2003 Good afternoon and thank you to the Securities Institute for the opportunity to talk to you today. In two months, | will have been at Orica for two years. It has been quite a journey. Very challengin
Slide 2: Our businesses: Mining Services, Agricultural Chemicals, Chemicals, Consumer Products
Our businesses — Mining Services, Agricultural Chemicals, Chemicals, and Orica Consumer Products and the 14 sub units of these businesses - are all Number One in their chosen markets, globally in mining services and locally in chemicals, fertilisers and paints. We manufacture leading brands that con
Slide 3: Our key business regions and global explosives industry
Our 4 key business regions are Australia/Asia, Europe, Latin America and North America. The global explosives industry structure and Orica’s position is attractive: Orica is the worlds largest supplier of commercial explosives with a global market share of around 20%. Regionally, the global explosiv
Slide 4: Incitec Pivot and Chemicals business
Incitec Pivot Limited has a very strong position in East Coast markets and sells Australia’s largest product range. The business supplies Australia’s world competitive agricultural industry selling more than 3M tonnes of fertilizer per annum. Orica is Australia’s largest manufacturer, trader and dis
Slide 5: Consumer Products: sales and net assets
The business has sales of $640M and Net Assets of $220M. This is a fundamentally good business underpinned by our brands and our technology: Our brands are the most recognised and trusted by Australian consumers. Research shows that 8 out of 10 consumers think of our brands when buy paint. Our techn
Slide 6: Profitability growth over 15 years: key take-aways
The key take-aways from the graph are: e the CAGR in profitability over the last 15 years in these core businesses of Orica has been reasonable at 5.4%. Growth climbs to over 7% if you include international explosives which was essentially break even when it was purchased in 1997. Of course growth w
Slide 7: Strategy and half year result
In relation to strategy, we have identified the businesses which can produce results and those which can’t. Those which can’t, have been sold or written-off. So how are we performing against this approach of Efficiency, Culture and Strategy. The latest scorecard, if you like, is our Half Year Result
Slide 8: Culture and strategic goal
Turning briefly to Culture. We are committed to developing a performance culture driven by commercial and financial outcomes and personal accountability. At Orica, the employees have developed four principles which set the guidelines about how we act and behave. The Principles are: e Safety, Health
Slide 9: Economic Profit on Funds Employed approach and build on strength
Our approach has been to move up the Economic Profit on Funds Employed axis, ensuring all of our businesses generate an economic profit . We will do this even if it means that we withdraw from unprofitable business segments and move backwards on the growth axis. The horizontal line illustrates growt
Slide 10: Related growth of our existing best businesses
2. Related growth of our existing (best) businesses. Research shows that related growth close to the core of existing businesses is far more successful than large step outs. Indeed, large step outs are more often than not giant leaps into the abyss rather than leaps to greatness. So over the medium
Slide 11: North America explosives and Incitec Pivot
Out of all of our strategic business units, our explosives business located in North America, is the one that is yet to achieve an 18% RONA, an internal hurdle we view as equating to a breakeven economic profit. That said the business has come a long way ina short time. In the first six months of th
Slide 12: Incitec Pivot volumes, guidance and summary
Incitec Pivot advised in its Information Memorandum that the sales volume trend in the second haif of the year to date has been consistent with the first half. Volumes were down by an average 13% for Incitec Pivot Limited in the first haif. This of course, has had an effect on Orica as have the toug
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