Slide 1: DCR 1A
DCR 1A ey a wh i Wn A A alii crn ing | i ate
Slide 2: Why Restructuring Was Necessary
WHY RESTRUCTURING WAS NECESSARY ¢« Business does not meet Orica’s internal benchmarks of 18% RONA ¢ Business, has been, and is likely to be impacted by, high gas and ammonia costs going forward * Cost and capital base was too high compared to some of our competitors
Slide 3: What the Restructuring Will Involve
WHAT THE RESTRUCTURING WILL INVOLVE ¢ Reduction of headcount * Relocation of activities ¢ Restructuring of service Disclosed to arrangements the market in May 2004 * Rationalisation of field sites * Reduction in capital employed on the ground
Slide 4: Deliver
WHAT THE RESTRUCTURING WILL DELIVER Restructuring and rationalisation will deliver: * amore competitive North American Mining Services business * a business that is capable of delivering sustainable economic profit assuming: — underlying coal demand in the USA improves — under performing contracts a
Slide 5: Where the Headcount Reductions Will Occur
WHERE THE HEADCOUNT REDUCTIONS WILL OCCUR Reduction in headcount Denver head office Finance, HR, Administration and IT 19 Technical Centre 4 Sales, Marketing and Supply Chain 9 Site rationalisation 33 (1) TOTAL HEADCOUNT REDUCTION 65 (1) Exclusive of 14 FTE’s related to new business
Slide 6: Cost
WHAT THE RESTRUCTURING WILL COST US$ millions (NPAT) notes Cost Manpower related " 6 IT improvement projects 2 Productivity improvements 3 General transition costs 1 Restructuring costs 2 12 Based on a AUD:USD exchange rate of 0.70 cents A$M >>>>> 16.4 * Total headcount reduction of 65 2 Will be dis
Slide 7: North America - Post Restructuring
NORTH AMERICA - POST RESTRUCTURING ¢« Total headcount — close to 900 * Capital employed in the business ~USD $200M - $210M* ¢ Business capable of delivering sustainable economic profit * + + exclusive of Watkins assets