Orica Limited · ASX:ORI
Orica — Investor Presentation (June 2009)
49 slides from Orica's investor presentation, Jun 3, 2009
Slide 1: Orica Mining Services
For personal use only Orica Mining Services Presented by John Beevers CEO Orica Mining Services Wednesday 3 June 2009
Slide 2: Corporate Video
For personal use only Corporate Video
Slide 3: Contents
Contents For personal use only • Introduction to Orica Mining Services • Proactively Managing the Economic Downturn • Establishing Step Change in Operating Efficiency • Growth Opportunities for the Future
Slide 4: Business Strategy
Business Strategy For personal use only 4. Leverage the global 1. Differentiation through business platform to investment in rapidly disseminate best innovation, new products, VISION: practice and to meet the services and supply chain. needs of global customers. “To be the global leader in commercia
Slide 5: Delivering The Promise
“Delivering The Promise” For personal use only SH&E – “Ensuring Our Future” • Commitment to eliminate fatalities from No injuries to anyone ever. our work environment. Value people and the environment. • Thorough incident review by Orica Senior Management. Commercial Ownership Run the business as if
Slide 6: Reduce energy and emission intensities by up to 5-10%
Reduce energy and emission intensities by up to 5-10% Finding ways to reduce energy There is no single ‘answer’ to the carbon problem. Most improvements and greenhouse gas emissions are incremental and are the result of hard work, close collaboration is the most difficult issue faced Bod sou Sees by
Slide 7: Delivering The Promise
“Delivering The Promise” For personal use only SH&E – “Ensuring Our Future” • Commitment to eliminate fatalities from No injuries to anyone ever. our work environment. Value people and the environment. • Thorough incident review by Orica Senior Management. Commercial Ownership • Our focus is on cont
Slide 8: Delivering The Promise
“Delivering The Promise” For personal use only SH&E – “Ensuring Our Future” • Commitment to eliminate fatalities from No injuries to anyone ever. our work environment. Value people and the environment. • Thorough incident review by Orica Senior Management. Commercial Ownership • Our focus is on cont
Slide 9: Delivering The Promise
“Delivering The Promise” For personal use only SH&E – “Ensuring Our Future” • Commitment to eliminate fatalities from No injuries to anyone ever. our work environment. Value people and the environment. • Thorough incident review by Orica Senior Management. Commercial Ownership • Our focus is on cont
Slide 10: Our Products
For personal use only Our Products
Slide 11: Our Products
For personal use only Our Products
Slide 12: Our Products
For personal use only Our Products
Slide 13: Our Product Supply Chain
Our Product Supply Chain For personal use only Bulk Transportation safety focus S&OP Productivity Initiatives Initiating Systems
Slide 14: Our Services
Our Services For personal use only R&D Driven Organisation Blast Based Services Service & product delivery
Slide 15: Blast Based Services in Action
Blast Based Services in Action < Click Here > For personal use only
Slide 16: Blast Based Services
Blast Based Services < Click Here > Vibration and Air Blast Monitoring For personal use only
Slide 17: Stratablast - Value Blasting Service
StratablastTM - Value Blasting Service For personal use only < Click Here >
Slide 18: Global market and OMS position by region
For personal use only North America Global Asia (including China) Market ~$2.9b Market ~$13.3b Market ~$3.6b OMS Position Number 2 OMS Position Leader OMS Share 0-20% Latin America EMEA Australia Pacific Market ~$1.3b Market ~$3.5b Market ~$1.9b OMS Position Leader OMS Position Leader OMS Share 0-20
Slide 19: Commodity Exposure Increases Earnings Resilience
Commodity Exposure Increases For personal use only Earnings Resilience • Coal End Market Diversity (Global) – Demand driven by power generation and steel consumption. TunnellingOther – Thermal Coal consumed in power generation, 0% 1% Coal - Thermal has demonstrated low volatility during the Q&C 21%
Slide 20: Contents
Contents For personal use only • Introduction to Orica Mining Services • Proactively Managing the Economic Downturn • Establishing Step Change in Operating Efficiency • Growth Opportunities for the Future
Slide 21: Proactively Managing the GFC
Proactively Managing the GFC For personal use only Responded quickly to downturn through: – Quick-wins: eg. travel and recruitment restrictions – Fixed cost controls – Activity based head-count reductions – Improved debtors compliance, including shorter payment terms – Inventory management improveme
Slide 22: OMS Performance
OMS Performance For personal use only Despite difficult market conditions: – Profit up 18% on 2008 to $319m 700 600 16% * – Maintained tight controls on cash EBIT MARGIN 500 12% EBIT A$M management 400 300 8% – Trade Working Capital to Sales improvement 200 4% of 0.5% 100 0 0% 2006 2007 2008 2009 Re
Slide 23: Contents
Contents For personal use only • Introduction to Orica Mining Services • Proactively Managing the Economic Downturn • Establishing Step Change in Operating Efficiency • Growth Opportunities for the Future
Slide 24: Step Change in Operating Efficiency
Step Change in Operating Efficiency For personal use only • Manufacturing – implementing Lean Six Sigma • Supply Chain – Sales & operations planning • Resource Modelling – Bulk / service delivery – Plant Rationalisation (eg North America) – In-plant Resource Optimisation – Latent capacity opportunit
Slide 25: New Manufacturing System - Lorena, Brazil
New Manufacturing System - Lorena, Brazil For personal use only Conveyor Lines Cells Three Conveyor Assembly Lines Æ 5 Manufacturing Assembly Cells. New system resulted in: – Labour productivity and cost improvement – Production capacity improvement – Process cycle efficiency – Reduced inventory lev
Slide 26: Step Change in Operating Efficiency
Step Change in Operating Efficiency For personal use only • Manufacturing – implementing Lean Six Sigma • Supply Chain – Sales & operations planning • Resource Modelling – Bulk / service delivery – Plant Rationalisation (eg North America) – In-plant Resource Optimisation – Latent capacity opportunit
Slide 27: Supply Chain: Sales & Operation Planning
Supply Chain: Sales & Operation Planning For personal use only Business Model- Four Critical Initiatives AN Prill Manufacture 1. Transportation safety Prill Transport: Rail 2. S&OP – Improved responsiveness to market Warehouse & Distribution Prill Truck Third Party Manufacture Truck CUSTOMER 3. Matc
Slide 28: Step Change in Operating Efficiency
Step Change in Operating Efficiency For personal use only • Manufacturing – implementing Lean Six Sigma • Supply Chain – Sales & operations planning • Resource Modelling – Bulk / service delivery – Plant Rationalisation (eg North America) – In-plant Resource Optimisation – Latent capacity • Improved
Slide 29: Plant Rationalisation (eg North America)
Plant Rationalisation (eg North America) For personal use only North East Site Rationalisation Review Current Proposed NE 9 to 5 (5 Close,1 new) • Using a resource modelling approach: – 12 sites were reviewed – 7 of these sites were closed as of April ’09 – 1 new site added • The proposed site struc
Slide 30: In-plant resource optimisation
In-plant resource optimisation For personal use only
Slide 31: Step Change in Operating Efficiency
Step Change in Operating Efficiency For personal use only • Manufacturing – implementing Lean Six Sigma • Supply Chain – Sales & operations planning • Resource Modelling – Bulk / service delivery – Plant Rationalisation (eg North America) – In-plant Resource Optimisation – Latent capacity • Improved
Slide 32: Step Change in Operating Efficiency
Step Change in Operating Efficiency For personal use only • Manufacturing – implementing Lean Six Sigma • Supply Chain – Sales & operations planning • Resource Modelling – Bulk / service delivery – Plant Rationalisation (eg North America) – In-plant Resource Optimisation – Latent capacity • Improved
Slide 33: Contents
Contents For personal use only • Introduction to Orica Mining Services • Proactively Managing the Economic Downturn • Establishing Step Change in Operating Efficiency • Growth Opportunities for the Future
Slide 34: Growth Opportunities for the Future
Growth Opportunities for the Future For personal use only • Geographic • Manufacturing • New Products & Services • M&A
Slide 35: Growth Focus: Geographic Expansion
For personal use only Orica is generally under-represented in Russia, China and Africa Growth Focus: Geographic Expansion
Slide 36: Growth Opportunities for the Future
Growth Opportunities for the Future For personal use only • Geographic • Manufacturing • New Products & Services • M&A
Slide 37: Growth Focus: Manufacturing Expansion
For personal use only Growth Focus: Manufacturing Expansion
Slide 38: Growth Opportunity in Focus: Bontang
Growth Opportunity in Focus: Bontang For personal use only Project to build a 300ktpa AN Plant is on budget and progressing to schedule • Plant will protect our existing business in Indonesia. • Our updated supply/demand forecast for both South East Asia and Australia/Asia continue to support the in
Slide 39: Growth Opportunity in Focus: Bontang
Growth Opportunity in Focus: Bontang For personal use only • Critical infrastructure construction has commenced with the Tursina Substation. • Purchased long-lead items such as this Turbine Casing for the main process gas compressor to ensure that the timeline is met. Man Turbo Steam Turbine Casing
Slide 40: Growth Opportunity in Focus: Kooragang Island
Growth Opportunity in Focus: Kooragang Island For personal use only • Undertaking a feasibility study to increase the production capacity of ammonium nitrate from 430ktpa to 750ktpa (70% increase) by: – Installation of a 4th nitric acid plant – Installation of a 3rd ammonium nitrate plant – Modifica
Slide 41: Growth Opportunity in Focus: Nanling
Growth Opportunity in Focus: Nanling For personal use only • Orica Joint Venture (Orica 51%, Nanling 49%) • Located in Hunan Province in southern central China • Construction of a Non Electric Detonator manufacturing facility with an annual capacity of 40 million pieces per year • Manufacture long p
Slide 42: Growth Opportunities for the Future
Growth Opportunities for the Future For personal use only • Geographic • Manufacturing • New Products & Services • M&A
Slide 43: Growth Opportunity: New Technologies
Growth Opportunity: New Technologies For personal use only
Slide 44: Electronic Blasting Systems
Electronic Blasting Systems For personal use only • Electronic Blasting Systems (EBS) continue to be the next revolution in blasting practices. • Orica is a world leader – with a continuing focus on new product development.
Slide 45: Electronic Blasting Systems: New Tunnelling Technology
Electronic Blasting Systems: For personal use only New Tunnelling Technology
Slide 46: Growth Opportunities for the Future
Growth Opportunities for the Future For personal use only • Geographic • Manufacturing • New Products & Services • M&A
Slide 47: Growth Opportunities
Growth Opportunities For personal use only • Orica is well positioned to take advantage of new growth opportunities. • We continue to evaluate potential acquisitions and divestments to enhance our leadership position.
Slide 48: Summary
Summary For personal use only • Managing the business fundamentals tightly – Continued growth in earnings and operating cash • Operational step changes in efficiency, building for the future • Solid growth plans for the future – Geographic expansion – Manufacturing expansions – Increasing revenue st
Slide 49: Disclaimer
Disclaimer For personal use only This presentation has been prepared by Orica Limited. The information contained in this presentation is for informational purposes only. The information contained in this presentation is not investment or financial product advice and is not intended to be used as the