Orica Limited · ASX:ORI
Orica — 2008 Analyst / Investor Tour
36 slides from Orica's conference presentation, Jun 30, 2008
Slide 1: 2008 Analyst / Investor Tour Minova
2008 Analyst / Investor Tour Minova Sandy Arbuthnot 30 June 2008
Slide 2: Presentation outline
Presentation outline • Introduction • Financial Summary • Business Overview • Update on Excel Integration • Organic Growth • Tunnelling • Growth Strategy Summary Orica Analyst/Investor Tour 2008 – Minova Group Presentation 2
Slide 3: Introduction
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Slide 4: When we are talking about Minova…
When we are talking about Minova… Orica Analyst/Investor Tour 2008 – Minova Group Presentation 4
Slide 5: Minova's global reach
Minova’s global reach Lenisk Kuznetsk (Russia) Kemerovo Essen (Russia) Alfreton (Germany) Karaganda (UK) Poland (Kazakhstan) Marion Carspach Ukraine Clearfield (Utah) (Illinois) Czech (France) Grand Junction Ohio (Colorado) Blue Field (West Virginia) Georgetown Beijing Grundy (Virginia) (Kentucky) S
Slide 6: Minova overview
Minova overview • Global leader in roof control products and geotechnical solutions – Mining – Underground civil engineering (Tunnelling) • Key attributes – Chemicals, specialty powders and steel products – Application expertise and equipment enhance the Minova offer – Strong customer/supplier relat
Slide 7: Financial Summary
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Slide 8: Revenue by geography – HY March 08
Revenue by geography – HY March 08 APA 16% Europe 38% Americas 46% APA - Asia Pacific and Africa, Americas includes North and Latin America Orica Analyst/Investor Tour 2008 – Minova Group Presentation 8
Slide 9: Revenue by product – March HY 08
Revenue by product – March HY 08 Powders 8% Other 15% Steel Bolts 38% Injection Resins 20% Resin Capsules 19% Orica Analyst/Investor Tour 2008 – Minova Group Presentation 9
Slide 10: Revenue by end market – March HY 08
Revenue by end market – March HY 08 Civil Engineering 12% Hardrock 12% Coal 76% Orica Analyst/Investor Tour 2008 – Minova Group Presentation 10
Slide 11: Business Overview
2 ORICA MINOVA Business Overview S.. My ‘ed re, “SS —
Slide 12: Minova International – Global Management Team
Minova International – Global Management Team • Michael Reich – Chief Executive Officer • Bruce Cassidy – President & CEO USA • Jan Petzold – General Manager Europe • Karen Stoffels – General Manager New Business & Integration • Marek Grocholewski – General Manager Tunnelling • David McKinnon – Gene
Slide 13: Industry drivers
Industry drivers • Underground coal production - Open cut to underground - Accessing deeper coal seams - Increase of coal production in emerging markets such as Russia and China - Coal in future energy mix • Underground metal mine production - Open cut to underground - Base metal and gold price • In
Slide 14: Market size and market share
Market size and market share Estimated Estimated Market Major Market Size Position/Share competitors Product (A$M) Steel bolts 1,200 Leader Jennmar, DSI Resin capsules 300 Leader Jennmar, DSI Injection grouts 350 Leader Weber, BASF Specialist 300 15% BASF cements Note: Excludes China Steel bolts cov
Slide 15: Competitive Advantage
Competitive Advantage • Only global player • Brand and reputation • Combined technology offering of resin capsules, steel bolts and products and services for ground consolidation and ventilation works • Customer / supplier relationships • Lowest cost manufacturer • Minova is well positioned in emerg
Slide 16: Minova know-how – currently 68 patents
Minova know-how – currently 68 patents 22 patents 16 patents Formulation Application Resin capsules Resin capsules Injection grouts Rockbolting Powders Ventilation walls IP 7 patents 23 patents Manufacture Equipment Resin capsules Bolts Chemical blending & packaging Pumps Steel bolts Drill machines
Slide 17: Current priorities
Current priorities Management • Build new senior Management Team and full implementation of the new regional structure • Focus on resourcing the support roles new business and tunnelling Operations • Lowest cost manufacturer Orica Analyst/Investor Tour 2008 – Minova Group Presentation 17
Slide 18: Current priorities
Current priorities Growth • Integration of recent acquisitions e.g. Excel, SCS • Unifying branding - MINOVA • Combined technology offering, this including the integration of the expanded product offer (recent acquisitions) into the existing Minova offer • Customer / supplier relationships • Ongoing
Slide 19: Update on Excel Integration
& orica MINOVA Integration Update on Excel = a 5 q ¥ me, ; y, \ _ = Qo . \ P- é of a
Slide 20: Acquisition timeline - recap
Acquisition timeline - recap Oct 2006 Sep 2007 May 2008 2011 18% RONA to be achieved on all three Cost: A$870M Cost: A$775M Specific financials acquisitions Synergies: A$19M Synergies: A$58M not disclosed Implementation costs: Implementation costs: Completed May A$26M A$64M 2008 Orica Analyst/Invest
Slide 21: Financial targets
Financial targets Financial Year 30 Sep Total (A$M) Synergies (1) 45 • Efficiency 24 • Growth 21 Integration Costs 90 • Expense 59 • Capital 31 EPS Positive Yr 2008 (after transaction costs) • Financial forecasts consistent with original acquisition objectives • Tax synergy benefits are being delive
Slide 22: Integration update Benefits
Integration update Benefits • Integration is “on-track” • Implementation of Orica’s core procedures and policies will be completed by end of calendar year • SH&E risk assessments performed for all major sites within Minova and confirmed high Minova standards • IT Standard Operating Environment on tr
Slide 23: Integration - identified risks Benefits
Integration - identified risks Benefits • Growth – geographies / priorities • Growth – appropriate resources • Competitor response • Employee retention • Culture integration • Steel supply Orica Analyst/Investor Tour 2008 – Minova Group Presentation 23
Slide 24: Organic Growth
& orica MINOVA Organic Growth = a 5 q ¥ me, ; y, \ _ = Qo . \ P- é of a
Slide 25: Minova – success in new markets
Minova – success in new markets Compound Year started Annual growth rate (1) Russia 2000 40% China 2006 200%+ Kazakhstan 2007 150%+ Minova has a proven track record of successfully entering new markets (1) Last three years or since inception Orica Analyst/Investor Tour 2008 – Minova Group Presentati
Slide 26: Minova – success in new markets
Minova – success in new markets Key points for entering new markets • Tailored approach • Flexibility, consider joint venture • Close co-operation with regulatory bodies and mining companies • Local management • Careful market research • Strong technical support Orica Analyst/Investor Tour 2008 – Mi
Slide 27: Minova China – establishing in emerging markets
Minova China – establishing in emerging markets Orica Analyst/Investor Tour 2008 – Minova Group Presentation 27
Slide 28: Minova China – success in emerging markets
Minova China – success in emerging markets $m’s 9 8 7 6 5 4 3 2 1 0 (1) (2) 2006 2007 2008 Cumulative average growth rate in excess of 200% since 2006 (1) Annualised based on 8 months actual (2) Annualised based on March ‘08 half year Orica Analyst/Investor Tour 2008 – Minova Group Presentation 28
Slide 29: Tunnelling
& orica MINOVA Tunnelling
Slide 30: Revenue by end market
Revenue by end market Civil Engineering 12% Hardrock 12% Coal 76% Tunnelling is currently 12% Orica Analyst/Investor Tour 2008 – Minova Group Presentation 30
Slide 31: Tunnelling business - characteristics
Tunnelling business - characteristics • Higher margin potential - Mission critical for project progress - Cost of product minimal v cost of downtime • Historically focussed in Europe • Targeting growth in other regions such as North America, LATAM and rapidly growing Asian market • Experienced team
Slide 32: Tunnelling business – recent examples
Tunnelling business – recent examples Photos of recent tunnelling projects • Japan • Iceland • Spain Orica Analyst/Investor Tour 2008 – Minova Group Presentation 32
Slide 33: Tunnelling business – current projects
Tunnelling business – current projects • Switzerland • Iceland • Spain • Czech • Austria Orica Analyst/Investor Tour 2008 – Minova Group Presentation 33
Slide 34: Growth Strategy Summary
& orica MINOVA Growth Strategy Summary
Slide 35: Growth strategy - summary
Growth strategy - summary Low productivity markets will swing to high productivity markets Boltex New China to Russian regions Hardrock Insulation shotcrete Phenolic resin Existing Ventilation structures INTEGRATION regions New Existing products/ Products services Orica Analyst/Investor Tour 2008 –
Slide 36: 2008 Analyst / Investor Tour Minova
2008 Analyst / Investor Tour Minova Sandy Arbuthnot 30 June 2008