Change of Segment Reporting

Ahead of the 2024 financial year full year results release on Thursday 14 November 2024, Orica (ASX: ORI) today provides details of changes to its segment reporting. This follows completion of the recent Cyanco acquisition in the Specialty Mining Chemicals segment, and the Terra Insights acquisition in the Digital Solutions segment. Both acquisitions are in line with Orica’s strategy to ‘grow beyond blasting’ while continuing to profitably grow its core blasting business.

For the 2024 financial year, Orica will report its financial results in the following reportable segments:

1. Blasting Solutions includes Orica’s core production and supply of explosives and blasting systems to the mining, quarry and construction industries across Australia Pacific and Asia, North America, Latin America and Europe, Middle East and Africa.
2. Digital Solutions includes the newly acquired Terra Insights business (completed 29 February 2024) and comprises the following:
   • Orebody Intelligence (including Axis Group, Hopper Industrials Group and RIG Technologies);
   • Blast Design and Execution; and
   • Geosolutions (including GroundProbe and Terra Insights).
3. Specialty Mining Chemicals includes Orica’s existing sodium cyanide and emulsifiers businesses together with the newly acquired Cyanco business (completed 30 April 2024).

The 2023 financial year and 2024 half year financial results have been restated to reflect the new segment reporting structure.

There is no change to Orica Group earnings and associated balance sheet as previously reported.

The following attachments aim to assist the investment community during transition to the new segment reporting structure:

• Restated Segment Reports for the year ended September 2023 and half year ended March 2024
• Restated Compendium for the year ended September 2023 and half year ended March 2024. An Excel version of the Compendium can be found at: https://www.orica.com/Investor-Centre/presentations
   

Second Half Performance Update

• Consistent with the outlook provided at the 1H2024 results, 2H2024 underlying EBIT, before contributions from Terra Insights and Cyanco, remains on track to be higher than the prior year and slightly better than forecast:
  • Blasting Solutions: The core business remained strong with continued demand for our products and services across the mining and civil infrastructure value chains and increasing adoption of our blasting technology offerings. All planned maintenance activities at the manufacturing sites in Australia were successfully completed.
  • Digital Solutions: Demand remained strong for our suite of digital offerings and value-added services despite continued softness in mining exploration activity. Terra Insights is being successfully integrated into the Orica group and is tracking in line with the investment case. EBIT contribution from Terra Insights after integration costs is expected to be minimal this financial year as forecasted.
  • Specialty Mining Chemicals: Good progress has been made on integration activities, new contract wins and network optimisation post completion. Planned maintenance activities and safety upgrades at the Winnemucca plant were brought forward into this financial year and has resulted in lower-than planned production. This has led to a one-off earnings impact, resulting in a lower FY2024 EBITDA contribution than forecasted. However, FY2024 EBIT is expected to be in line with the investment case.
  • Depreciation and amortisation, including Terra Insights and Cyanco, is expected to be $425 million to $435 million.
  • Significant Items in 2H2024 will include:
    • ~$34 million net profit from the sale of excess land at Yarraville, Australia.
    • ~$24 million net loss due to an increase in the Botany Groundwater treatment plant provision as a result of the anticipated reduction in treated water revenue following closure of adjacent businesses in the Botany Industrial Park.
    • ~$50 million net loss from restructuring costs associated with the transfer of functional roles to the Global Business Services centre in Manila and operating model changes in some parts of the EMEA region in line with Orica’s country rationalisation strategy.
  • Total Significant Items for FY2024 is expected to contribute ~$120 million net profit.
  • Minority Interests for the period are expected to be in line with 1H2024.
  • Capital expenditure, including Terra Insights and Cyanco, is expected to be $450 million to $460 million.

The 2024 financial results are subject to audit, further details will be provided when the results are released on Thursday 14 November 2024.