Orica Limited (ORI) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to Orica's 2025 Investor Day. For those who I haven't met, I'm Delphine Cassidy, the Chief Communications Officer. Before we start today's proceedings, just let me take you through some of the safety aspects of today. If by any chance, there is security and we need to go out, the evacuation centers are there, and we'll take it from -- we'll take note from the Fullerton staff. But before we start to, I'd like to acknowledge the Gadigal people of the Eora Nation of whom we meet here today. I'd like to pay my respects to past and present. We do appreciate the time that you've taken to join us here today in Sydney and for those who have joined us on the webcast as well. So let me start with today's proceedings. Today's Investor Day has been structured in two sections. In the first section, Sanjeev will give you an update on the business performance and progress on our strategy. Jamie will take you through to the refreshed capital framework that we announced today. This will be followed by an update on three segments: Specialty Mining Chemicals led by Andy Stewart, Blasting Solutions, led by Germán Morales, and Digital Solutions led by Angus Melbourne. We will then finish that section with Rachael Sandel, who will take us through how we actually use AI in our business. So that's a very interesting segment. We'll have time for Q&As after each session. We'll take questions from the floor as well as questions from our guests on the webcast. For those in the room, please put your hand up and a microphone will come to you. We're also using the Slido facility for those on the webcast. You can access the Q&A session by scanning the QR code that is on the screen. After you submit your question, your question can get upvoted by other participants, and we will follow that order. We'll start with the most upvoted questions. Attendees in the room, you can also join into Slido. The QR code is on your table. The first section will finish at around 12:30 when we'll break for lunch. The second section, which is our technology expo, where those in the room will break into their color groups, which you can find on the back of your name tags. There were three booths set up at the Fullerton, showcasing Orebody Intelligence, Blast Design and Execution and Geosolutions. Two booths are on this level just down the corridor and one is on the level below. At each booth, there will be a presentation followed by a Q&A time, and then you'll rotate to the next group. Please note that there will be no photography or recording allowed in the booths. For those on the webcast, we'll break after the first section and resume for closing comments and any further Q&As at around 3:15 p.m. We do appreciate that your time is valuable. So we've structured this program to give you the much -- as much information as possible. I do encourage those here in the room to meet with the ExCo team during the breaks, during the lunch break and morning tea and after the presentation. And with that, I'd like to hand over to Sanjeev Gandhi to begin today's event.

Thank you, Delphine. Thank you all for joining us today, and hopefully, we'll make it productive. It's a full house. It must be a quiet day in the market if there's something like that happening. We obviously also welcome everybody who's joining us on the webcast. Moving on to the next slide. I'll do a brief introduction of -- one back, please, of the ExCo because there's been a few management team changes in our management team. You obviously have met Jamie. Jamie is our CFO, and you'll obviously hear from him later today, and you all know Delphine. A couple of changes, you met Andy before, but Andy is here in his new role as the Head of our Specialty Mining Chemicals business. He, by the way, is the one who acquired Cyanco, and now he basically is responsible for integrating it and running it and making it all a big success. Rachael, you'll meet later today. Rachael is our CIO. So she is the custodian of our famous ERP system, the SAP system. And she's the one who's also helping us to bring AI into the organization and try and monetize all the work that we have done with our investments. You all know Angus. Angus has a slightly different role. He's now the Head of Orica Digital Solutions. He's also the CTO, and he's the one who acquired Axis and Terra Insights. So now he's responsible for the integration and obviously making it a success. And some of you have met German. German heads Australia Pacific. He also has a new role as our Chief Sustainability Officer because he's the one who spent most of the $100 million capital in decarbonizing our Australian assets. So you see there's a bit of a team here. Within Orica, if you spend money, you spend capital, you build a plant, you take ownership for it. There's no escaping. And that's how we manage accountability within the management team. So obviously, you'll spend some time with them and also hear from them later today. A bit of a brief word on what we're going to show you today. What we will show you in terms of I know one of our friends here in the room said, you've already given us the cream, and I thought we should just go out and have lunch, but we still do have a program for you, and I hope we'll make that interesting. What we'll show you today is just the tip of the iceberg. There's obviously a lot happening in Orica in tech, in digital, but we are conscious of the fact that there's a lot of proprietary knowledge and IP, and we're also conscious of the fact that this is an open audience. So we are being a bit cautious as to what we tell you. But I'm hoping that whatever we demonstrate today will give you an idea of the excitement we feel and the potential of the business and the very long runway that we have with our tech businesses, both in Blasting, but also in the Digital business and also, obviously, in Specialty Mining Chemicals. Moving on. I'll start with a brief business update, but obviously, safety first. So we've had a fantastic performance in safety. And obviously, we are -- we continue to be committed to keep our people, the environment, our partners safe as we operate. Our serious injury case rate when we ended 2024 was at an all-time low. That's an industry benchmark, not just in our industry, but in all manufacturing industry, and we are very proud of it. Despite that, we had a fatality because of a traffic accident. So that's been -- that will be the big focus going forward in terms of managing better the fleet of vehicles that we have on the street. And as the business grows, we've got more and more material movement happening, and as a result, potential for accidents, especially in emerging markets. So that's something that we're really watching very, very carefully. In terms of decarbonization, we've done a lot of heavy lifting. I mentioned the $100 million investment in decarbonizing our continuous manufacturing assets. That phase is over. We're very happy with it. I mean we just got a nice little $15 million -- up to $15 million bonus coming out of the decarbonization because we generated carbon credits. So that's a nice positive. It just proves the fact that it's not just the right thing to do, but it also has a payback when you continue to manage your Scope 1 and Scope 2 emissions. We reached a milestone we celebrated that of eliminating, eliminating not avoiding, eliminating 1 million tonnes of CO2 equivalents at Kooragang Island. And that's obviously a big milestone, and that's just the beginning. That's equivalent to taking 600,000 cars off the road. So this is real. This is not greenwashing. These are just not numbers that we throw out there to impress ourselves. For those who have visited Kooragang Island, we have a monitoring center there, a pretty high-tech digital where you can go in and in real time, see the amount of CO2 that we've been capturing with this technology and converting into harmless water. So that's a pretty, pretty cool achievement. We have also implemented similar technology, as you know, in Yarwun and in Carseland, and we will now start to reap the benefits of managing our Scope 1 and Scope 2 emissions going further. So a lot more work to do. But again, the message here is most of the big capital spend for decarbonizing our own assets and managing Scope 1 and Scope 2 is done now. And now it's all about being smart and sensible in terms of if we spend capital, what's the payback and doing the right things. And then we continue to monetize, obviously, the investments we have made over the last 4 years. Turning now to Slide 7. I think most of this we've already announced on Friday. We've had a great start to this financial year. As I informed all of you when we closed the last financial year, the momentum has continued despite the excitement and the volatility in the market caused by the Trump administration. Now fortunately or unfortunately, Orica is used to volatility. We've seen everything that is possible in a lifetime in the last 4 years. I don't want to remind people, but it's like a -- sometimes like a bad dream where you have China, Australia, geopolitics, you've got a global pandemic, you've got a couple of wars happening and supply chain disruptions, inflation going through the roof. I'm doing this for 35 years. I've never seen this. So it's been a massive challenge, and we've shown our resilience. We've got a fantastic team. They've been working 24/7, 365, and I'm really proud to say that we have never let a customer down. So -- but all of that comes at a cost, and we do expect that when we provide that kind of service and reliability, we do expect to get paid for this. So now the expectation is that the earnings for the first half, and you'll have to wait until May when we close the half will be better than planned. There was a lot of discussion on what planned means. So I'll give you a little bit of background of what that means. What we normally do every year around this time is we start planning budget for the next 3 years. It's a 3-year cycle that Orica does. We start in April. We get it approved in August, and then we end the financial year in September and then the new financial year will start from October. And then that 3-year plan forward-looking plan then derives the RONA that we also make public to you. So just as a reminder, the RONA cycle for this year -- these 3-years starting this year is 13% to 15%. So when we started the year, we had a plan with the first half, second half split. And the numbers so far until February tell me that we are doing better than our plan, our budget, our target. Now obviously, that's not a public number. It's not very helpful to you. But the reason I tell you this is because it just gives you a feeling that we feel confident of the business. The business is really trending well. across the board. And our numbers are looking better than our own plans, and we should know what we should expect in 6 months, and we have done better than that. So in terms of forecast accuracy, that's the best number we know, the 6-month cycle, and we have done better than that. So that tells you that underlying business is really strong. Despite two cyclones in Western Australia, which shut Burrup down, the massive cyclone and disaster we are facing now in Queensland, where we've got the Yarwun. A lot of our customer sites are inundated. There's no service. If the sites are under water, there's no mining, everything stops. So we've gone through all of that. And despite that, in Australia, we've done very well. And then obviously, the geopolitical uncertainties that we face every day, supply disruptions, costs, inflation, all of that. So yes, business is robust. Blasting Solutions continues our core business -- we're doing this for 150 years. It's going strong across both the mining and the civil infrastructure. There's upside in civil if there's more investments in infrastructure happening over the next years or so. The technology uptake in blasting, and we'll talk about that later, has been very, very strong. So that's really exciting. We've invested a lot of capital, R&D and efforts in blasting tech, and now it all starts to pay back in terms of scaling stuff like wireless and variable density emulsions and all of that. So that's doing very well. Digital Solutions is doing very well. We are happy with where we are with our integration. Angus will give you an update on Terra Insights plus the rest of the portfolio. Specialty Mining Chemicals, the integration is well on track. I did say that we are going to spend a lot of time, effort and resources on stabilizing the assets we have acquired. It was run by private equity. So you can imagine the assets are fantastic. They've been badly run, poorly maintained, and they are not up to Orica standards. And for those who are interested, the HCN chemistry is a very, very hazardous chemistry. It's one of the most dangerous top 2, I would say, phosgene and HCN chemistry are the two most dangerous chemistries that chemical industry handles, and we are doing HCN chemistry for 30 years at Yarwun. And we do understand how important it is to operate those assets safely from a process safety point of view. So we've been spending a lot of cash, capital, resources. We've sent our experts from Yarwun onto the sites there at Winnemucca and at Alvin. And we've just gone through a significant shut several months where we had no production to fix the first line of production at Winnemucca, that asset has now restarted. Now we are planning end of March shutting down the second line. There are two lines there and then also the utilities so that we can fix the safety issues, the safety upgrades, but also the reliability issues. So it will be a bit of a burden in the first year. It was part of the plan. So we did call out that we'll get a hit of up to 20 million because the volumes are not being produced as if the plant was running at full loads. And then we already called out last year, we had gas supply curtailment at Yarwun because the pipeline had a fire. So that continued into the first quarter of this year. So that also constrained volumes. As a result, we do have a negative from our plan of up to 20 million for the full year. Expectation is that Andy and the team will fix everything this year. And then hopefully, we get a full run -- full clean run of all three assets next year. That gives us the first signs of what the potential of the business is. And then obviously, any further debottlenecking expansion, more volumes out of the system of three assets that we have globally will be a significant upside. So we did announce an impairment of between $300 million and $350 million. Most of that -- the majority of that is noncash. Jamie will talk more about this, but we've always called out that in LatAm, we had -- we've always had limited headroom. So we've always called that out in our annual reports. We do have a new leader in LatAm. So obviously, a fresh pair of eyes looking into the business, and then we had to take the unfortunate decision to do an impairment there. So LatAm has a new leader, Victor, who will be based out of Santiago. And just to close that loop, Asia will have a new leader, Raj, who is also in the room. Raj will move to Jakarta to run our very exciting Asia business. With that, maybe one last comment on our manufacturing and turnaround teams. The Winnemucca plant turnaround was successfully completed. Kooragang Island had a nitric acid and ammonium nitrate shut. The plant is starting up on the weekend. They continue to do an amazing job, our turnaround team. They're just absolutely fantastic competent on the ball, and they don't let down. So it's just amazing what the team has done over the last 5 years. Last year, we had the heaviest turnaround schedule in the history of Orica. And everything went on plan, on budget, safely done. And all the plants are now in much better shape as a result of all the work and capital we've invested. We've spent a lot of sustenance capital on these heavy assets, $200-plus million every year. But that gives us the reliability and the throughput so that we are able to leverage this amazing network of assets and supply chain that we have unbeatable in the industry. And talking -- I cannot stop before I mentioned a little bit on geopolitics. It's just amazing what's happening out there. We are a global organization. We are used to this. We'll see what happens with tariffs. We've got our plans. And -- we've got this fantastic global network where we're able to move products and services around at short notice. And we have done that during COVID and during supply constraints. So it's just another external factor that we'll continue to manage. We'll see how all of that pans out. But remember, we've got a massive footprint now after the Cyanco acquisition in the U.S. So that's a net positive for us because we do see sometimes product being dumped from Asia, sodium cyanide into the U.S. market from China and Korea. So they will have tariffs that supports us. And the U.S. market is doing well, and our business is doing well there. And we'll continue to invest in the U.S. I think it's today the most -- one of the most attractive destinations in the world, the United States. So whatever happens with politics, I think we put our heads down. We focus on what we can control. and continue to be successful. Moving on. You've seen -- on the next page, you've seen our strategy on a page. The only change from when we launched this in November 2021 is that we now have three primary segments to report on. That's our core Blasting business. It's our Specialty Mining Chemicals and it's our Digital Solutions business. And then obviously, the areas where we focus on, we call them where we win. And what's been amazing and really satisfying in the last 4 years is we have built three world-scale market-leading franchises. We are #1 in blasting globally by far. We are #1 specialty mining chemical company in the world by far. and we've got the leading offerings in our digital solutions. And the combination of these three is so powerful. There's nobody, nobody on earth who can offer what we do today for our mining customers and infrastructure customers. And that's really exciting because now with the heavy lifting in acquisitions done, integration well on the way, it's all about integrating those offerings, taking the bundles to our customers, solving their challenges and being valued for it. So that's where we are. So we continue to focus on the execution of the strategy. It's been 3.5 years. So if you look at the traffic lights, which we share with you every 6 months, it looks pretty good. We are well on track with most of our major strategic initiatives. I would say it takes between 4 to 5 years to successfully execute on the strategy. So we are now at 3.5 years, another year, 1.5 years to go. And we should see then the big benefits coming out already this year, but also the year after and so on and so forth. So exciting times and more to come. Yes, I did come up with an aspiration, which is part of the end result of that strategy, which is 50% earnings, not revenue, earnings from our core Blasting business, 50% from the non-blasting business. A lot of people took that as a target and started asking me when will that happen? I said it's an aspiration. And why? Maybe I'll explain that a bit because it's great news. It's a great problem to have my core blasting business continues to grow, right? So it's not static. It's not shrinking, it's growing. So it's a moving target, which means that we have to work harder with our non-blasting business to reach that aspiration of 50-50. But you see where we're coming from 2021 when I came in, more than 90% of our business came from blasting. This year, the expectation is non-blasting business will contribute 20-plus percent. If we add the Q&C business to that, which is not very different to what we do on the mine site, that's much bigger. So we're getting there. We're getting there. It will not happen overnight. It's an aspiration. It will take some time. And the reason we do that is because it's a business that's growing faster than our core blasting business. It's obviously higher margins. You see that in the numbers every 6 months. It's low capital. And it basically plays into the megatrends that our consumer base, which is the mining industry and the civil industry is facing, right? Higher cost, low productivity, very, very challenging to do to develop greenfield, brownfield mines today, not enough supply, high demand. All of that plays into the integrated solution we offer. It's all about productivity, efficiency and ESG. And that's the fun part. That's where the excitement comes. And so yes, we'll get there. We'll get there. And honestly, if we don't get 50-50 and we get 60-40, I'm not disappointed because that's a massive scale-up that we'll do of our non-blasting business over a short period of time. So yes, more to come on this one. Moving on. Great. So now the exciting part. I'll hand over to Jamie, who will talk about our new capital management framework. Thank you.

Well, good morning, all, and thank you again for joining us today. It's my pleasure as Chief Financial Officer to address all of you in the room and those of you that are joining us today via the webcast. Today, I'll be taking you through our refreshed capital management framework, what we see as a critical body of work designed to support our growth aspirations and most importantly, deliver increasing returns to our shareholders. And before I do that, as Sanjeev mentioned, I wanted to briefly provide some context on the expected significant items that we announced last week. In our first half results, we will be recognizing between a $300 million to $350 million significant item, primarily relating to the impairment of our Latin America business. At 30 September last year and disclosed in our financial statements, there was limited headroom between the carrying value and the value and use of our Latin American assets. Based on the current forward order book and an updated assessment of future after-tax cash flows, given the increasingly competitive environment within the region, we will be recognizing an impairment charge in our half year accounts that will be released on the 8th of May. Of the $300 million to $350 million charge, $220 million to $245 million relate to noncash adjustments of goodwill and intangible assets. With respect to the $80 million to $105 million of cash costs, these primarily relate to restructuring and demobilization costs associated with site exits, costs associated with the rationalization of our initiating system facilities as part of our discrete network optimization program, together with deferred tax losses that can no longer be carried forward. Also included are restructuring costs following the decision to exit our Mali business in West Africa, given the recent deterioration of business conditions. Latin America remains an important region for Orica, given its exposure to key commodities, which have strong growth forecasts. With strong demand for Specialty Mining Chemicals and Digital Solutions, Orica's blasting technology is well positioned to enhance productivity in the region's complex mines. Turning now to capital management on Slide 13. At Orica, we understand that effective capital management is crucial to our success. Our refreshed framework is built on three core pillars: capital sourcing, balancing capital and finally, capital deployment. These pillars provide a disciplined and structured approach in how we best optimize our capital resources efficiently and effectively through the cycle. And to provide some context, capital sourcing is the process in which Orica requires the necessary financial resources to fund our operations, investments and growth initiatives. This involves identifying and securing the optimal mix of debt and equity financing options to support our strategic objectives, while at all times maintaining financial stability. Secondly, balancing capital forms a crucial component of our capital management strategy as it directly influences our ability to sustain operations, deliver profitable growth, uphold investor confidence and maximize returns to our shareholders. And key elements that are critical to Orica and how we balance capital include effective financial risk management, disciplined improvements in the management of trade working capital, a clearly articulated dividend distribution policy and related to this, a clearly stated approach towards the application of excess capital beyond balance sheet requirements when it accumulates through the earnings cycle. And lastly, our approach towards capital deployment is focused on the strategic allocation of our financial resources to maximize shareholder value and support long-term growth objectives. And this includes setting appropriate hurdle rates for investments above our cost of capital, continued review of the effectiveness of our sales channels and go-to-market strategies, including the prioritized allocation of capital across our global business operations. These three pillars that underpin our capital management framework will enable us to be dynamic and responsive to changing market conditions and make informed decisions that deliver long-term shareholder value. So what I'd like to do now is briefly talk through our updated capital management framework in broad terms and then more importantly, talk to some proof points that you can look to now and into the future to demonstrate that we are delivering positive outcomes for our shareholders. Turning now to Slide 14. Our capital management framework is designed to provide clarity and transparency in how we think about deploying capital within our business. To briefly summarize, it obviously starts with resilient through-cycle operating performance. And as I shared in the release of our 2024 full year results, Orica delivered the highest earnings before interest and tax result in the past decade. And as Sanjeev mentioned earlier, we are on track to continue this trajectory into the 2025 financial year. The consistent generation of strong net operating cash flow supports the circa $460 million of capital expenditure that we invest each year for safety and asset maintenance, supporting our sustainability commitments and for organic growth investment across our business operations. Prioritization of this spend is critical and safety, regulatory and compliance investment will always come first at Orica, followed by capital to protect our environmental license to operate and net zero commitments. And the investments in tertiary catalyst abatement at our Carseland, Yarwun and Kooragang Island sites are recent examples. Investments in minor growth capital and improvement projects are assessed at appropriate hurdle rates above pretax WACC with these investments primarily targeted to increase margins, reduce operational costs and drive increased cash generation. A strong balance sheet at all times is a key principle of our capital management framework. And as an outcome of our review, Orica is transitioning from gearing to leverage as our key balance sheet policy measure. We've set a target policy range of net debt to EBITDA, excluding leases of 1.25x to 2x. This range aligns with our optimal weighted average cost of capital, better informs the mix of debt and equity and aligns with our investment-grade credit rating. Now Orica in the past has experienced periods of sometimes significant dislocation between the credit rating criteria and the gearing measure, which has resulted in misaligned expectations for equity investors under the prior gearing target framework. The adoption of leverage as the company's key balance sheet policy measure will better address these misalignments and is consistent with industry peers. We understand that investors in high-quality companies like Orica value the consistent payment of dividends. After our review, we believe our current dividend payout policy range of 40% to 70% of underlying earnings provides the flexibility to distribute appropriate and consistent returns to our shareholders. And if we continue to successfully execute on our strategy, as we've done over the past 4 years, we will inherently generate surplus cash flow, the positive position that we find ourselves in today. And in the absence of a major strategic acquisition or investment opportunity that delivers risk-adjusted enduring returns to shareholders above pretax weighted average cost of capital, we will apply a disciplined approach in the application of surplus balance sheet capacity. And without Australian franking credits, which we don't anticipate to start generating at the earliest until 2027, an on-market share buyback is currently the most value-accretive option on average to our shareholder base. And I'll provide some more context on this shortly. So now importantly, let me talk to some practical examples as you work down the framework that demonstrate our focus and application of effective capital management. Turning now to Slide 15. As we continue to pursue our ambition of growing beyond blasting, our strategy continues to deliver resilient through-cycle operating performance, well positioning the business for growth to weather external unforeseen impacts. Proof points that demonstrate our focus on operating efficiency and capital productivity include a 55% increase in EBITDA over the past 4 years, and our cash conversion has consistently operated around 100% throughout this period. In terms of working capital, the improvements that we delivered last financial year have continued into 2025. And you will see when we release our half year results in May that we are targeting a further improvement in rolling cycle days versus the prior corresponding period, moving us closer to top quartile trade working capital performance relative to industry benchmarks. And as I mentioned in the release of our 2024 full year results, our 2023 net operating cash flow performance was a record high for the company. with the 2024 result only below this due to transaction costs relating to the Cyanco and Terra Insights acquisitions. Strong and consistent net operating cash flow allows us to reinvest in the business. And as I said earlier, at Orica, the safety of our people and our contractors always comes first. Turning now to Slide #16. We continue to prioritize investment related to the identification of major hazards and associated key controls across all areas of our business. As an example, we have prioritized investment in in-vehicle monitoring systems and other transport-related systems to address our key risk related to the transportation of explosives on public roads. This aligns with our commitment to modernize our delivery systems fleet with the latest safety features and enabling increased volumes across our bulk product suite, including technology that supports the application of 4D with around 170 new or refurbished MMUs entering service over the 2022 to 2024 period. At our 2024 year-end results, Sanjeev spoke to the fantastic job our turnaround team did last year in successfully executing such a heavy schedule and the great job they're doing this year. This, combined with our continued targeted investments in debottlenecking projects at our plants has set the base for our performance to date in 2025, where our continuous manufacturing plants remain fully loaded and oversold. Together with this, our discrete network optimization program has rationalized and simplified our initiating system network and supply chain, delivering significant benefits to the program to date directly to the bottom line and mixed margin. As we also highlighted in last year's results, lowering our carbon footprint and investing to support our Net Zero ambitions and commitments are key elements of Orica's license to operate. As Sanjeev said, in this area, we have invested over $100 million since 2021, delivering a 43% net reduction in greenhouse gas emissions and avoided over $200 million of penalties from emissions reduction regulation to 2030. And as a result, we are well down the path of achieving our target of a 45% reduction by 2030 from 2019 levels. And finally, our continued focus and discipline on the deployment of minor growth capital investment continues to have a positive impact on mix and margin with the business on a similar run rate to the material uplift that we delivered last financial year. The continued delivery of our strategy, operating efficiency and capital discipline has delivered an almost doubling of earnings before interest and tax over the past 4 years. And this, in turn, has supported our strong balance sheet. Turning now to Slide #17. Maintaining a strong balance sheet aligned to our investment-grade credit rating is a key element of our capital management framework. As mentioned earlier, Orica is transitioning from gearing to a leverage target policy range of 1.25x to 2x, aligned with an optimal weighted average cost of capital and our investment-grade credit rating. There may be times where we operate for periods towards or marginally above the top end of the policy range, for example, as part of a planned funding of a strategic growth initiative. But for the most part, we will operate well within the policy range, allowing the generation of cash beyond balance sheet capacity to be deployed toward capital management initiatives more regularly if there is no compelling strategic investment alternative. In terms of relative balance sheet strength, at 30 September last year, our average committed debt facility tenor was 3.9 years and 4.7 years for drawn debt. We had a strong liquidity position of around $1.4 billion in undrawn committed bank facilities, and we are very well progressed in refinancing of committed bank facilities of $310 million maturing in 2025 and further prefinancing of an additional $140 million maturing in 2026. A strong balance sheet enables us to consistently generate returns for shareholders, and we remain committed to our dividend payout policy targeted at 40% to 70% of underlying earnings franked subject to availability. Our dividend payout ratio has increased from 47% to 56% over the past 4 years, and dividends per share have increased by a compound annual growth rate of 25% over this period. And as I stated earlier, we believe our policy range is appropriate and provides the necessary flexibility to consistently provide returns to shareholders even during periods of economic uncertainty or market volatility. And in this sense, a strong balance sheet and capital management strategy are very closely correlated. Turning now to Slide #18. Resilient through-cycle operating performance and a strong balance sheet inherently delivers surplus cash flow and capacity, the positive position we find ourselves in today. This provides optionality to consider opportunities to further maximize shareholder returns. In the past 3 years, we believe the on-strategy acquisitions of Axis, Terra Insights and Cyanco will deliver enduring value for shareholders, ultimately increasing long-term value per share. Our focus is very much on the delivery of the respective acquisition business cases, and the team will be providing an update today on our progress to date. Following the almost $1.8 billion in capital deployed for the acquisitions and the continued strong operational performance in terms of both earnings and cash flow generation, we have the capacity to return surplus capital to shareholders. And as you will have seen from the materials that we provided this morning, Orica has announced an on-market share buyback of up to $400 million. We believe the buyback is appropriately sized. It represents circa 5% of our current market capitalization. It will be completed in 12 months, and it allows us to operate within our leverage target policy range. The on-market buyback is expected to commence after the 28th of March. And for clarity, the buyback is not dependent on further material property sales across our portfolio. As an example, the second stage of the Deer Park sales process that our teams are currently working through. Orica will continue to evaluate the feasibility of future share buybacks within the context of our capital management framework and strategy. Turning now to the next slide. So in summary, in line with our strategy, we are delivering consistent profitable growth and improved cash flows, supported by strong demand for our innovative products, technologies and services across the global mining and civil infrastructure value chains. The ultimate goal of our updated capital management framework is to maximize shareholder returns over time. We believe evidenced by the increase in our 3-year average RONA target range announced last year. We believe now is the appropriate time to return excess capital to shareholders and enhance shareholder value. We believe that this capital management framework will provide the clarity and transparency needed to achieve our financial goals and maximize total shareholder returns over time. And today's announcement demonstrates the Board and management's confidence in Orica's financial strength and outlook now and into the future. So thank you. And with that, I'll now hand over to Andrew.

Thank you, Jamie, and good morning all. It's nice to be with you again today. It's an opportunity to present our brand-new global segment, Orica Specialty Mining Chemicals, a premium, differentiated global franchise that we formed in September of last year. I'll share with you our early progress, our future plans and the opportunities that lie ahead by bringing together an industry-leading mining chemicals portfolio. By way of a quick orientation, it's helpful to reflect on the specialty mining chemicals boundary, which includes our Yarwun and Cyanco cyanide proposition together as well as our manufacturing and distribution capabilities in emulsifiers supporting our blasting Solutions business and of course, our very early activities with ASX-listed Alpha HPA. This new global franchise is focused on the ore processing component of the mining value chain. Next slide, please. As Sanjeev has mentioned many times, our strategic delivery has been really focused on reinforcing and growing our core Blasting business while concurrently also establishing growth pathways beyond Blasting. We have structurally reinforced our strategic delivery to grow beyond blasting by forming two new global segments, Orica Specialty Mining Chemicals and Orica Digital Solutions, which Angus will present later this morning. As a recap, Orica Specialty Mining Chemicals now has 240,000 tonnes per annum of sodium cyanide production capacity spread across 3 manufacturing sites: Yarwun in Australia; Winnemucca in the State of Nevada in the United States and also Alvin in the State of Texas in the United States. This makes Orica the largest mining dedicated producer of sodium cyanide in the world by a factor of nearly 2x. What's really important is that our manufacturing assets are located in close proximity to the major design hubs. With the exclusion of China and Russia, Australia is the next largest gold producing country, and it's been well serviced by Yarwun, a plant that we've operated for over 30 years. Canada is the next largest gold producing country and is forecast to be the fastest-growing global market. This market is served from our Alvin and Winnemucca facilities as well as our 2 terminals in Quebec. The United States is, of course, the next largest producing gold country and 75% of U.S. gold production comes from the state of Nevada on the doorstep of our Winnemucca facility. We also access the global seaborne market via the Houston Ship Channel and the Port of Brisbane. Ghana, Indonesia, Mexico and Peru collectively produce around 520 tonnes of gold per annum, and these markets are competitively accessed from both Alvin and Yarwun, fully leveraging Orica's existing presence and expertise. At the heart of our customer proposition is Orica's global supply resiliency. Alvin and Yarwun work in combination to enable supply chain flexibility and optimization to support our customers operating in multiple jurisdictions. From a flexibility perspective, in the 10 months since we've owned Cyanco, we have already dual permitted 22,000 tonnes of product so that we can interchange supply source from Alvin to Yarwun and vice versa. This is very important to our customers given the frequent supply chain disruptions and the geopolitical challenges ahead. In terms of optimization, we have already switched supply between Alvin and Yarwun to capture arbitrage spreads in feedstock and shipping costs. Importantly, this agnostic approach to supply source at Orica's sole determination is being supported by our customers and being hardwired into our new commercial contracts because they are most concerned with supply resiliency. In summary, no one has better access to the miners than Orica. Our deep domain expertise, our advantaged asset locations and our channel to market is unrivaled. Turning to the next slide, please. Overall, I'm pleased with the integration plan with Cyanco, and we've made significant progress in the 10 months of ownership. There is no performance metric more important than making sure everyone, everywhere, every day goes home safe. And in the 10 months of Cyanco ownership, we are delivering a step change in safety performance. We've had no serious injuries. We've improved our environmental performance, and we've reset our regulatory relationships that are underpinned with transparency, constructive engagement and most importantly, improvement. We have 16 integration work streams. And in the first 10 months of ownership, we've already signed off 8 of those as complete. We've also reset our major customer relationships to establish enduring partnerships underpinned with performance and mutually beneficial outcomes. In the first 10 months, we've signed new commercial arrangements with two out of three of Cyanco's largest customers, and we've added additional new supply arrangements to both of those accounts. We have also exited loss-leading supply arrangements. In terms of our cost synergy delivery, we're ahead of the plan that we set forward at the time of acquisition. The incumbent Cyanco management team have exited in an orderly fashion, and we have issued lease terminations in Mexico and Canada and the U.S. because we want to co-locate with existing Orica locations for economies of scale in functional support and expertise. We will continue to track all of these actions to make sure that they ultimately flow through to the P&L per the commitment we made at the time of acquisition, USD 10 million run rate synergy by the end of year 3. From an operating model perspective, -- we've established a single point accountability for all of the main facets of delivery, and we now have fully integrated the Specialty Mining Chemicals leadership team and arranged that team to best reflect the way customers buy from us and also to make sure that we can deliver operational excellence. In addition, we've deliberately moved our safety and compliance team from the Houston and office to the Winnemucca site because we want this expertise to be where the exposure hours are the greatest. In terms of the continuous manufacturing plants, we knew that investments in the operations integrity management system would be required at acquisition. While at times challenging, I am immensely proud of the site team at Winnemucca for taking the plant offline when required to ensure the safety parameters are never compromised. Extended maintenance activities and safety upgrades at the first solution plant, P1 have been successfully completed in the first half and the planned maintenance and safety upgrades for the second solution plant, P2 will be undertaken in the second half of this financial year together with the utility systems. While we communicated last week, this will result in some lost production in FY '25, it is critical that we complete these improvements to ensure the asset operates safely, reliably and enables to face the market with confident security of supply for our customers. It should also be noted that the planned maintenance and safety upgrades are all within the sensible CapEx uplift that we assumed at the time of acquisition. We are determined to get the asset on a strong process safety platform with the intent of FY '26 being a full year of clean earnings. Turning to Slide 23, please. So let me talk about the market fundamentals now. And as you're well aware, Orica's commodity mix is such that gold and copper make up around 46% of our sales revenue. And we feel this is a nice balance that enables growth capture, but also a defensive earnings position in the context of the geopolitical uncertainty. To support our leadership position in sodium cyanide, we expect the positive momentum in the gold market to continue before prices ultimately stabilize at elevated levels over the next few years. Overall, we expect mid-single-digit growth over the medium term because growth is forecasted -- or demand growth is forecast to outstrip supply growth. Furthermore, we also anticipate gold production to be strongest near Orica's manufacturing assets and established trade lines. If I look at the demand side, gold tends to hold its value during times of economic uncertainty or market stress. Sovereign debt levels, disruptive trade policies and geopolitical tensions increasingly make gold a safe haven asset, providing a hedge against currency fluctuations. Recently, there are three fundamental drivers driving demand growth. First of all, rampant buying by central banks, helping the gold price defy a stronger U.S. dollar and share market, two factors that have traditionally been headwinds for gold. And gold, of course, has now overtaken the euro to become the world's second largest strategic reserve behind the U.S. dollar. Buying growth has also come from Western and Asian investors. Physical gold exchange-traded funds, particularly in China, have seen investors withdraw from property and equity markets as the world's second largest economy struggles to reignite growth. And finally, we should never underestimate the strong over-the-counter retail demand for gold, particularly in Indian and Asian jewelry sales. If I move across to the supply side, as you're aware, across the broader mining industry, significant mine development is required to maintain the current supply levels. Global mining capital expenditure remains 50% below the 2012 peak. The supply of gold is limited by its natural scarcity and the complexities of mining and processing. What is pleasing that in S&P's recently reported drilling metrics, there are now 277 exploration drilling projects across the globe, of which 56 are drilling for new gold discoveries. Over the long term, these new mines will require sodium cyanide. Of the gold-producing mines in production today, degrading ore quality and increasing ore complexity is driving higher cyanide consumption per tonne of treated ore. This all translates into favorable evolution of our customers' buying behaviors, increasingly sensitive to security of supply and in some regions, less sensitive to the unit price of sodium cyanide. While the fundamentals that I just described are positive for Orica, like all global manufacturers, the risk to the sodium cyanide business is overcapacity, particularly from Chinese and Korean acrylonitrile manufacturers. These producers are not focused on the mining value chain, but rather come in and out of the market to trade cyanide as a byproduct. Fortunately, the acrylonitrile market remains subdued over the medium term, predominantly due to slower anticipated automotive sales. But as a response, we deliberately pursue multiyear customer contracts to avoid the swings and roundabouts in the moment from the global acrylonitrile market. Turning to the next slide. As I mentioned earlier, our customer approach is to create enduring multiyear relationships underpinned by genuine performance and commercial benefit. In support of this, we are developing technology and software solutions that help improve productivity and cost efficiency for our customers. We have fully integrated Orica's and Cyanco's Applied Technology groups to stand up a unified team developing and deploying technology software under the scientific brand name. These products are not giveaways as part of sodium cyanide supply contracts, but are rather additionally priced offerings that deliver demonstrable value to our customers. You can see a couple of case studies on the slide here, and these are very recent examples of our customers embracing this portfolio to increase overall recovery, improve productivity and improve safety outcomes. Our cyanide analyzer range provides actionable data-backed insight for optimizing dosing. Our sparge delivery systems avoid single-use packaging and the significant disposal costs as well as reducing the potential for worker exposure to sodium cyanide dust. Our simulation software called LeachIT helps operators achieve best practice process parameters. And importantly, Orica has trained over 800 customer representatives through the course of calendar year '24 to support our customers with safe handling once the product leaves our custody and to make sure we do our bit in maintaining the industry's social license to operate. Beyond cyanide and beyond gold, we have a clear plan in place to expand the product portfolio of specialty mining chemicals, specifically around reagents and leaching chemicals. We'll have more to say about this in the future as those plans start to crystallize, and we'll do so under the brand name of [ OptiOre ]. Turning to the next slide, please. As I've highlighted, Specialty Mining Chemicals is a highly differentiated mining-focused global franchise. No one has better access to the mines than Orica. Our deep domain expertise and regional presence, our advantaged asset location in the major demand hubs and our channel to market from global seaborne trade and last-mile delivery is unrivaled. We are committed to working with our customers, offering value-add products that complement their safety, recovery and efficiency as well as capturing new business at appropriate margins and critically, delivering appropriate shareholder returns through the medium term to you, our wonderful shareholders. Thank you.

Thank you, Andy. We'll now open up for Q&As on the three topics that we've just been presented with. So let me take questions from the floor. Put your hands up, please, and we'll get a microphone to you as soon as possible. Brook, over to you.

Yes. It's Brook Campbell-Crawford from Barrenjoey. Just on the trading update, you noted that you're higher than planned so far this year. Do you mind just spending a minute going through pinpointing the areas of the business that are going ahead of plan? And a bit of color on that would be great.

Yes. Thanks, Brook. So we always plan for seasonality, and that is why when we gave our full year guidance and forecast, we said we'd be close to around a 45-55 mix. And that was based on obviously some background information. One of them was the shuts in cyanide. We knew that we'd have to take extensive shuts. And it's not as simple as just the cost of the shuts. It's about maintaining supply. So we've not stopped supply to any customer despite these extended shuts. And this means that we have leveraged our network to move product from one site to the other, one continent to the other that comes at significantly higher costs. But the team came up with some amazing creative ways of minimizing those costs and minimizing movement of product internally, which helped us to save significant cost. The second is we always factor in some delays during start-ups, especially on an asset which is new to us. And when you open up a vessel or a reactor or a column, you don't know what you'll discover because when you do due diligence, you don't look inside the equipment. You can only see it from the surface. We were lucky that we did not find -- we found a few ugly surprises, but that did not lead to extended costs and maintenance and equipment replacement. So we got kind of lucky there. That was the second factor. The third was, obviously, we factor in seasonality and wet weather. That's not disappointed us. Unfortunately, we've had massive wet weather, especially here in Australia. But the network that German has built in Australia, in the past, when we had these kind of issues, we offtake stopped because mines are underwater and then we were not able to continue operations. So we had to take shuts off our continuous manufacturing assets, which was significant cost. What German's team has done is build a lot of resilience in our supply chain. Some of you know that we have acquired two world-scale emulsion facilities in Queensland, which have been added to our network. That's more than 250,000 tonnes of capacity. So we are able now instead of shutting down our continuous assets, we are able to move product and convert them to different forms. So you know that when there's a lot of water, you don't sell a lot of bulk, you sell more emulsion. And we were always capacity constrained. Now all of those constraints are over. And secondly, we were able to move product across. So when we had a lot of rain in Indonesia as one example. In the past, we used to shut Bontang down, now we moved Bontang product to other parts of the world because you know we are net buyers of ammonium nitrate. So there's a lot of optimization that's been happening. And the biggest positive impact, which is very pleasing to me personally is that we've really managed our costs very well. In an inflationary environment where everything is going up. We managed to control our overheads. We managed to control discretionary spend. And all of that translates obviously into better performance. So all three segments have done better than we expected. We've got the headwind in Specialty Mining Chemicals because of the extended shuts, which was kind of factored in, but it all happened this year because we pulled forward shuts in the first and second half to avoid that we have to take these shuts in 2026. So we want to have a clean run in 2026. So all of that meant that, yes, Specialty Mining chemicals will be below our plan, but ODS should be on plan and core blasting should be better than plan. So that's where we are at the moment.

A follow-up on M&A. It's obviously still core to strategy. And can you just confirm, would you be in a position to execute a strategic acquisition at the moment? Or is the priority very much bed down what you've done already, return capital to shareholders for the next couple of years? Just maybe confirm the thinking around that, please.

Yes. So we are committed to doing and executing and finishing the buyback unless something really surprising happens. I've said in the past that most of the heavy lifting in terms of M&A and building our portfolio is. I don't think there's anything out there that we'd be ultra keen to grab. Having said that, I've also said that if there's something interesting, I want a seat at the table, always. Ellen is in the room. Ellen heads our Corporate Development department and she's been instrumental in doing all our M&A. And I've also said in the past that we run through 30, 40 potential targets every year, and we don't stop doing that. We'll continue to screen, but there's nothing major in the pipeline at the moment, given the uncertainty in the market. And it's not a surprise that there are not too many sellers and there are not too many buyers today because people want to have a bit of stability and the valuations do not support the expectation. Despite that, there have been a couple of deals happening in the last weeks in the digital space. The multiples are still 20-plus, and we are not paying those multiples, no way. So we are extremely disciplined. We screen through 20, 30, 40 potential targets every year. Maybe we do one every second year as our track record has shown. So there's nothing major in the pipeline, but that does not mean that Ellen and the team have taken a vacation. They're very busy looking at potential targets. It's changed a bit in the past, we had to go hunting to look for targets. Today, we just wait and the world knows that we've done a few successful acquisitions, and we'll always look at something and people come to us now with deals. And so that means that we are always busy. But to confirm, we've got nothing happening at the moment.

Sanjeev, Andrew Scott, Morgan Stanley. I just want to dig down a little bit more into the LatAm impairments, if possible. I mean, obviously, important mining market, good growth rates there. Generally, from the explosive side has been pretty concentrated market. You lead with tech, and I'm sure you're going to tell us today how great your tech is. All those things suggest it should be a good market. So just trying to understand the difficulties or the challenges you're seeing that prompt the impairment and maybe stepping forward more broadly, should we read anything into that about the challenges of operating in a market where you don't have captive AN or your own AN and thinking sort of extending this to Europe and other markets?

Any emerging market is extremely challenging. And we've been operating in LatAm for decades. And yes, we don't have our own AN source there, but we have the most sophisticated supply chain to land the most cost competitive AN in LatAm. But -- and I've always said that our margins on those AN tonnes are traded margins. And if the market does not appreciate the effort we put in to move hundreds of thousands of tonnes into that market, we don't want to do it. So if you're not paid for our service, we are not interested in business. It's as simple as that. The market is extremely strategic for us. It's very challenging from several fronts. Geopolitics, I don't have to talk about it. Markets like Colombia, Argentina are basket cases, they have been forever, unstability, social unrest, strikes, protests, the threat of nationalization of the mining industry, taxes on minerals. There's a whole litany of challenges that we face there. It's not an easy market. You need a very, very strong heart and very deep pockets to try and do something there successfully. Despite that, look at the track record over the last 5 years of our business in LatAm, every year, we've shown improvement. This year also, our business will improve, right? So we're fully committed to the market. We love the market. We've got a very strong team. With the Exsa acquisition, we've got a strong asset base in Peru. But the effort of operating a massive supply chain and if there are receiving partners who don't appreciate that, we don't want to do that kind of business. So we wish others all the luck with that. We'll be very selective in what we do. And the big focus there is obviously our blasting tech wireless, for example, one of the biggest offtakers of wireless tech in the world is in LatAm. They love the product. We can't get enough there. Obviously, gold. Andy talked about it, it's a gold copper, huge market potential in LatAm. And so we'll continue to be very selective, which is something I've also said in the past, country rationalization. I think we are in too many countries. We are doing a lot of what I call hobby businesses because they are legacy. We acquired them 30 years back. We have to do it. There's an asset. Honestly, I don't have those kind of attractions to those businesses. So we really take a very hard look at is there a payback? Is there value? If not, shut it down. Unfortunately, can lead to impairments as we have done with our discrete -- we have shut down a discrete site, which became redundant. We have consolidated our operations into Lurin because that's where the scale is. It helps us to become more efficient. We take cost out. And we'll continue to do that, whether it's a country presence, we have stepped out of 3 countries in the last 5 years in LatAm, countries that were really on the fringe. I have no interest in going back in. And worldwide, we have stepped out of more than 10 markets. And the step out doesn't mean a one-way ticket of exit. It means that we don't have people and assets and capital on the ground. We have a distributor who does it for us. We enjoy the margin. They sell the product, we are out of it. So that's something we'll continue to do, but the potential for growth predominantly comes with blasting tech in LatAm. Obviously, our discrete products are EBS, WebGen emulsions, highly valued and appreciated. Clearly, the Orica Digital Solutions tech. I mean, FRAGTrack, for example, is a huge, huge success there. You go to any LatAm mine, a major mine, and you'll see our products on the gantries there, trucks passing through, looking at fragmentation, which is just amazing. And then clearly, specialty mining chemicals and emulsifiers. So yes, we'll continue to be very successful. We want to improve our margins. And wherever we see a chance to optimize our supply chain and reduce our working capital and investment where customers don't pay for it, we'll stop doing that kind of business. Now most of that write-off is legacy, yes. It's all from the past. It's all from 2018, '17, '19. And with a new pair of eyes, a new management team there, I think the timing was -- it's never a good time, but I think the timing was right for us to take that hit in this half.

Got a question here. And Andrew, there's another one here.

John Purtell from Macquarie. Just had a couple of questions. Firstly, for Jamie, just on the -- you mentioned the cash conversion you've delivered sort of about 100% in the last few years. Just in terms of how you think about a target for that going forward. I think you put a number of targets around a range of other things, but any informal guide or otherwise around cash conversion moving forward?

Yes, sure. Look, I won't give you a number, but we think about it in terms of rolling cycle days of working capital in particular. We're a very heavy working capital-intense business, and it's critically important that we manage that effectively. And we've challenged ourselves a lot in the business that working capital is too high, but we haven't really answered the question well, what should it be? What's best practice? So we went through an exercise last year where we benchmarked, I think, around 25 companies in the chemicals, explosives and agricultural industry and look at all elements of working capital. And it's quite interesting, the outcome from that. What we saw was, for example, on receivables, we're about middle of the pack, but we are improving and have been improving over the last 5 years. On inventory, very interestingly, we were actually top 2 and the top 1 was an agriculture company. And I think we're actually doing ourselves a disservice. If you think about how we service our customers, it's not a lot of bulk ex works. It's a lot of very small milk runs at the very small sites that are based on mines relative to big bulk movements. So I think the way that we manage inventory is actually a credit to the team and probably a strategic advantage. Where we were struggling in terms of accounts payable, we were dead last of all the companies that we benchmark. So we put a lot of discipline in now that as our supply agreements come up, there's a process where we go through to make sure that they are at least on Orica standard terms of 62 days. And I have given the business a target through the 5-year planning process that Sanjeev mentioned by the fifth year to be well and truly top quartile. And our progress so far this year has been quite encouraging.

And just a second question for Sanjeev, if I could. Just in terms of what you're seeing from your customers at the moment and how that ties into your margin mix. It sounds like your positive margin mix momentum is continuing. How do you see that holding up in a lower growth environment?

Yes. Thanks, John. Three challenges. I mentioned them earlier. If you talk to any customer, one is cost, cost to commission a mine, cost to invest in a greenfield or brownfield resource, cost of operations, it's gone through the roof as it is for us, as it is for anybody who operates in this environment. So that's their #1 challenge. Number two challenge is productivity, whether it's weather interruptions, whether it is license to operate, every miner we speak to is behind their mine plan. And that translates into the high commodity prices you see. It's not just -- there's not enough supply. And then there's a lack of exploration. So it's a perfect storm in terms of commodity prices will stay higher for longer, and this means there's an ability to -- and an appetite to pay us more for productivity and taking cost out. And the third one is clearly ESG, whether it's end of mine, whether it is vibration, whether it is dust, whether it's hurting people, it's obviously top of mind there. And we've got a solution for every problem that a miner may have and some that they don't even know they have. That's quite amazing what we have today. So -- but it doesn't come for free. We are very proudly asking for the right value and not everybody is willing to pay. And some think they've got better solutions, so we wish them luck, and we go on to the next one. So yes, outlook is good. A couple of weaknesses. I shouldn't be all positive all the time. It's not my style, coal. Coal in the U.S. especially. But given what's happened in the last weeks, -- my view on coal in the U.S. is slightly becoming positive because if Canada puts tariffs on power and fuel and oil and gas, there might be a revival of short-term revival. It's not going to be long term, a short-term revival of coal, which might mean even a bit of a positive tailwind in that part of the business. Our exposure to coal is tiny in the U.S., but it helps supply-demand in the market because if there's a competitor exposed to coal, they are worried. And then if competitors are worried, they can sometimes be a bit silly in terms of trying to dump those volumes and chase market share. So I'm hoping that they feel the same potential tailwind and then they start to behave a bit rationally and not panic. And the second concern is China, not new. We've been talking for the last 4 years. China property was the first challenge. Now it has become the automotive sector. Andy briefly referred to it. A lot of plastics go into the automotive industry, but a lot of steel also goes into the automotive industry. And that industry globally, not in China, but globally is in doldrums, which means continents like Europe, the U.S. will put tariffs on Chinese EVs. So there might be a backup of overcapacity and supply in China, which might have a negative impact on steel consumption. And there was just yesterday or a day before, a dart from the -- from Beijing to say that we need to cut back on steel production. So yes, that's -- it's a bit of a watch out. I was with the management team and the Board in India last week. We spent a week in India because most of my Board has never been there and some of my management team members have not been there. India is one big construction site. It's just mind-boggling, the amount of construction infrastructure manufacturing being built and the amount of steel and iron ore and met coal they need and also thermal coal. So that's a real highlight for consumption of coal, both met and thermal and iron ore because the steel industry -- the steel demand in India is going to grow double digit for the foreseeable future, which is at least a decade of investments because India needs desperately that infrastructure. So we went through three or four airports, world-class. And you can imagine, we -- in our careers as all of us, we have seen many airports. You don't see airports like Bangalore or Hyderabad or Mumbai or Delhi. It's just mind-boggling. And you just look around and see the amount of steel and aggregates they use and Orica was privileged to build the new -- support building the new airport in Mumbai, which has been commissioned the first runway. It's just mind-boggling the scale of what's happening in that country. So that's the upside. To the downside in China and the downside in China is not new. China has been going nowhere for the last 5 years, and it's a bit concerning. So we'll wait and watch. So overall, customer sentiment is positive. willingness to pay for our products and services is positive. Competition is always there. We've got pockets of strange behavior from competitors, and then we've got pockets of sensible behavior. So my advice to the industry is let's not panic.

Okay. Sorry, Scott Ryall from CLSA. Just very two quick questions. I guess, Jamie, congratulations for the new capital management framework. I think gearing metrics did go out in the GFC. So it's nice that you've got them now. I wonder whether you can comment on your payout ratio remaining quite wide. What the rationale for that is, please, given you've shown a willingness now to give capital back on an ongoing basis as well.

Yes. Look -- thanks for the question. We did review this as part of the overall framework review and sort of industry benchmarking, our ratio is wider than most comparative benchmarks. I guess, essentially where we got to, there's actually nothing wrong with the Orica dividend policy. We did look at what if we were to lift the base to 50% or what if we were to lower the top from 70% to 60% to have a 20% spread. Both of those have inherent messages behind them. But I guess what we got to was there's nothing fundamentally wrong with the policy. We don't have a progressive dividend policy. But if you look at, as I mentioned before, the payout ratio has been ticking up every year. That's something that we're trying to continue. And that way, we're rewarding our shareholders. So it's probably not the biggest problem to fix at the moment.

Okay. Sanjeev, in your comments on geopolitical uncertainty, you mentioned that the U.S. looks to be one of the more attractive places you can think of investing at the moment. Can you just give a bit more color in terms of the areas for Orica that you think are attractive, please?

Yes. But just to add one comment to Jamie, we don't have franking credits. So that's another reason why we said let's -- we reviewed it our Treasurer, Mark is in the room and he pushed back really hard at my brilliant idea to change things and said, sometimes doing nothing is a good thing. So thank you, Mark. So we'll review it once we are able to announce franking credits a couple of years down the line. But then we've got the option of buyback versus franking credits, and we'll see what makes most sense in terms of returning value to our shareholders. The U.S. market is interesting, attractive rundown. Look at the infrastructure in the U.S., I just talked about the excitement in India. You look at the infrastructure in the U.S., it's a long, long overdue for investments. You've got all of those announcements that have been made by the past administration, the IRA, the CHIPS Act, the Infrastructure Act, billions, maybe nearly close to $1 trillion was supposed to be invested into the U.S. economy never happened. So now we're waiting for the taps to be opened up, has to come. Something has to give because the infrastructure there is falling apart, and it's a bit sad to see. So anything in aggregates, whether an investor builds a data center, you need a lot of aggregates. You want to build a battery plant because the Chinese vehicles are now tariffed, a lot of aggregates needed because these are big blocks, big rooms and you need a lot of construction material. So that's one exciting part. And then Andy talked about gold. U.S. is one of the largest producers of gold in the world. And why would you not extract gold if you could today, $3,000 an ounce. And looking at crypto, gold is becoming more and more attractive. I know I've had a discussion with some of you as to is that really a valuable commodity. Honestly, I don't care. As long as it is mined and they want my products and services, I'm happy to cater to the gold industry. It's -- it's a beautiful commodity, you could say. So yes, gold, copper, exciting. Trade flows will change if there's tariffs on steel and aluminum, U.S. has resources. So we'll see whether that leads to a new boom in mining in the United States. Manufacturing overall in the United States will grow because self-sufficiency seems to be what's going to make America great again. So that means they need to invest in infrastructure, in manufacturing capability. We've got a fantastic base there now. It's our second largest market after Australia today, growing nicely, nicely profitable. So yes, a lot of opportunities. And honestly, I feel more welcome investing in the U.S. today than here in Australia. Gas prices don't even have to talk about it. Amazingly attractive. We can get the talent, I can get the engineers I need. I can get the safety experts. We can get the maintenance crews, 24/7 phone call away, all willing to serve. It's an expensive market. It's not easy to operate in the U.S. It's a big, big geography. But we've got the network. We've got the infrastructure in place. So why would you not be optimistic about the United States economy. And this is a real economy. This is not crypto and Bitcoin, it's manufacturing, it's demand, it's consumption. And the American consumer has shown they have been very, very resilient through the last 5 years, but also the last decades. So it's -- I am optimistic about the United States.

Sanjeev, I understand you mentioned tariffs at the outset, and I understand conceptually how your network will help you navigate tariffs or potential tariffs. But I just wanted to ask specifically about Carseland and into the U.S. and any risks you might see there, how you think that might play out.

There's always risk, yes always risk. It's not just -- so the trade flows, honestly, from Carseland to the U.S. is minimal. You know that we've got domestic sourcing in the U.S., which covers a majority of our domestic needs, so no impact. That's gas-based. So low gas prices, attractive sourcing, we are in good shape without the capital cost. So outstanding situation. There is a bit of trade flow, Brownsburg to United States, a little bit of Carseland. There's more of cyanide going into Canada, which is positive. But remember, I don't think there's any economy in the world who will not respond to tariffs. So there will be recipro. So in the end, what's going to happen is the consumer is going to pay higher costs. It will all wash out in the end. And we've got options, right? LatAm is in the vicinity. So I've got opportunities to move product out of LatAm where we've got fantastic manufacturing. If needed be, we don't see the need. If need be, a contingency plan to bring product from non-North American sources if the tariffs would force us to do that. The second option is, obviously, we -- with our discrete network, we've got new technology. We haven't really talked about this, but a new modular technology where we can build an assembly unit in weeks. That's a proprietary Orica technology. So if there's a need to, we can put a little bit of capital in Angus and make in America, which will then not put us into any kind of tariff issues. So honestly, not really concerned. The concern is what's going to be the impact on the end consumer, the higher cost. Somebody has to pay for these costs. So 25% tariff today, 50% tomorrow, maybe 100% thereafter, who knows? But those costs have to be paid by somebody in the end, it might hurt consumer demand, which is not good.

Nathan Reilly, UBS. Sanjeev, just a question around recontracting. I know you're always in an AN recontracting cycle every 3 years or so. But as you approach, I guess, the near-term, medium-term recontracting efforts, just how you're thinking about, I guess, the two factors that I'm thinking about in terms of potential increasing appetite or acceptance of Russian AN volumes and also gas supply arrangements here in Australia, obviously, high cost and just in terms of how you're thinking about your own recontracting efforts on that front and what that means for your customer AN recontracting efforts?

Yes. So I did mention in November that our recontracting cycle goes back to a normal of 20% to 30% contracts per year from the 40%, 50% that we were recontracting in the last 3 years. There is still significant supply risk, right? So my advice to the industry is don't take supply for granted. My assets are all sold out. German will talk about them. Everything is sold out. I don't have any spare capacity. I can make spare capacity available at a cost at a price. But my assets are fully sold out. I do not have the capability of providing safety nets and insurance to the industry. So better recontract in time, if not early, is my advice. Costs have not come down. You can look at IPP and most of the imports last year were us from Bontang into Australia because German was doing his major maintenance here. So we were significantly short on domestic capacity for domestic use. So we have to bring in hundreds of thousands of tonnes, extremely expensive, horrendous to handle. You know the nature of the product. Ports don't like it, warehouses don't like it, shipping companies don't like it. Nobody wants product on the roads. It's really tricky dangerous. We do not want to have an incident. I don't know if some of you followed, it wasn't Orica, but in the industry, a couple of incidents of explosions happening in Western Australia. Fortunately, it was Western Australia. There's nobody around, but it's -- that's the nature of this beast that we handle here. So ideally don't trade. And if you trade, then let the experts do it, people like us because we can handle millions of tonnes. So costs are high. Recontracting will happen as they happen. I've always said that this time, the recontracting cycle is different because we do offer the core business plus if you are interested and willing to pay, you get digital technologies. And if you're a gold customer, you have the option of buying sodium cyanide or emulsifier from us. So that's a much bigger package. So we have different discussions now, which is quite interesting, but also successful. We've had some really nice wins in the first couple of months of this calendar year. That momentum will go on. If Russian product comes back, Orica would be the single biggest benefiter because we are the single largest consumer of -- we were the single largest consumer of non-fertilizer grade Russian ammonium nitrate in the world before Russia-Ukraine happened by far. We have the most sophisticated supply chain to bring shiploads, multiple ship loads per month out of Russia all over the world. Nobody else can do this. right? But the Russian suppliers have put us on allocation. We have to pay cash in advance. That's what hurts our working capital needs. And then we basically get the cancellations an hour before the ship is due to depart sometimes. We've had incidents where we had to unload loaded ships because the Russian suppliers said no go, cancel. So less than 10% of our needs are coming out of Russia today. At one point of time, it was more than 50%. So don't depend on Russia, and they are used to shipping bulk to fertilizers. They don't like this little tiny irritant business of explosives. Because we buy bulk, they do deal with us, and we've got a relationship with them, 30-plus years, but they are not reliable, and we do not depend on them. We've got our own new network of non-Russian supply all over the world. And it's still too early. I know there was the news today that Ukraine has agreed to the truth. The question is, has Russia agreed and what will happen? Best case scenario, and that's something that I hope and pray that the war stops, so killing stops. And then someday, we can go back to our business in Russia because some of you might remember that was one of our most profitable businesses that we gave away to our team with the understanding that ever sometime in the future, if the doors open again, we will go back in. But very, very early, very, very early days. So it does not -- does not concern me.

We've got a question from Owen.

It's Owen from RBC. A couple of questions for Andrew on Cyanco. Just wanted to understand, I guess, you talked about trade flows coming out of the Albumin facility into the seaborne market. Just wondering if you can give us a sense of, I guess, the magnitude of that net export volume. And have you had any concerns regarding, I guess, customer pushback in an overheated trade war out of the U.S. So I guess, what your options are in terms of consuming that volume within the U.S. And just a bit more of just an administrative question. The scientific and the data platforms that you're providing within Cyanco, is that to be reported in digital solutions? Or is that still within the Specialty Chems business?

Yes. Great. Owen, nice to see you again. So maybe I'll take the second question first. So the digital offerings that we record in specialty mining chemicals will appear in this vertical. Going forward, I think as we develop some transformative software packages, then again, I'm really quite relaxed because we're working on those in a collaborative fashion with Angus' team. So again, I'm very relaxed as long as Orica can take something compelling to the market and we can win, I'm very relaxed about where those earnings sit. But today, they sit in, especially mining chemicals. I think the Alvin facility, so it's a bit different than Winnemucca, as you know. It's a byproduct plant. So it benefits from HCN feedstock from the Ascend acrylonitrile facility. Those tonnes today since ownership have really been going to Winnemucca and up to Canada because when we've taken Winnemucca offline, the most important thing to preserve is our value proposition to customers and to maintain that security of supply. One we're successful with Winnemucca this year as we progress through those shutdowns, that will free up tonnage from Alvin. We hope around 40,000 tonnes of product becomes available to the seaborne market. And as Sanjeev said, we're planning on the tariffs and the retaliatory -- the potential for retaliatory tariffs under a multiple range of scenarios. And we're very confident that however that unfolds, we will be able to rewire our trade flows to make sure that the plant is fully loaded and we place those tonnes into high-margin markets.

Got a question from Dan, and that will be the last one before we break for morning to. We'll have more time for questions after the next session. Dan, over to you.

Thanks, Delphine. So I think there were a few references to debottlenecking opportunities in your prepared comments. Can you just shed some light on these opportunities? And I guess, the potential incremental lift in capacity?

Yes. Dan, I mentioned that earlier that this is a standard practice. It's not rocket science. The entire chemical industry does this. We always creep capacity, and that's normally 1%, 2%, 3% annually. We have done that very successfully with our continuous assets. And he will -- once he stabilizes production at the new assets, we'll also look into at the two assets in the U.S., but also in Yarwun because today, we can benchmark all three and say, best netback, best returns for the capital we have to spend. And it's ongoing and the manufacturing teams are very creative and they are very smart. The only thing that constrains them is capital allocation. So we've been very strict about this. Jamie runs what we call the Orica Investment Committee, where every request for capital above a certain threshold has to be approved by Jamie. He's the Chair. So they put in a lot of work. They come up with brilliant ideas and some we approve, some we don't. our ratio of own manufactured, as an example, own manufactured ammonium nitrate to traded ammonium nitrate was -- we were under 50% for own manufactured and over 50% for traded. Today, the ratio has switched. We have more own manufactured product and which means we have to buy less, which is great news for us. And this has happened across Yarwun. Yarwun is running at record capacity has never seen before above nameplate. Kooragang Island, Burrup, Bontang and Carseland, but not a surprise, right? And as you can imagine, the last times are always money in the bank. So every incremental tonne you can make out of these assets, which are old depreciated assets, goes straight to the bottom line. So I highly encourage Jamie to approve them, but he obviously has his own views, and he wants to look at returns and ESG and carbon credits and all of that, and then he takes the right decisions. But I'm a big fan of debottlenecking and expansions. That's my world. That's what I like to do. So we'll do the same for Cyanco. We have not yet explored the potential there because Andy and the team don't have not had the time so far to do that. Clear focus is safety first, reliability; second, expansion, third. I don't know, Andy, do you want to add something on Cyanco.

No, I think we're very optimistic about what's possible. Yarwun is operating fully loaded above nameplate capacity and the -- so assets are high quality once we stabilize. So we -- as demand growth continues to outstrip supply growth in a well-structured North American market, I think brownfield expansion opportunities will present.

Okay. Thank you. Let's take a break. It's now past 11:00. We'll take a 15-minute break and get back here at 11:20. Thank you. [Break]

Thank you all for coming back on time. Let's start the second session. So in this session, you're going to hear from German on Blasting Solutions. So he'll be talking about Blasting Solutions as a segment. Then on to Angus and then Rachael. We'll try and spend as much time as we can on Q&A because I think that's where the breadth of the discussion happens as well. So I'll start off with German.

Thank you, Delphine. Good morning all. It's great to see you here today, and it's truly a pleasure to speak with you. So for those that might not know me, my name is German Morales, and I'm the President of Australia Pacific and Sustainability. Today, I will be providing an overview of Orica's global Blasting Solutions capabilities and expertise. highlighting how our products and technology solutions are adding significant value across the entire mining value chain. We will explore how our innovations are encouraging new ways of thinking and mining. Additionally, we'll discuss the key growth drivers and priorities for Orica, including the relevance of our commercial discipline and focus. At Orica, innovation and technology are central to our business. We are committed to being customer-centric and maintaining high-quality standards. These factors are crucial for our customer success and create long-term value for our shareholders. Turning to the next slide. Orica's journey in Blasting Solutions began over 150 years ago in the gold fields of Victoria in Australia. Since then, we have experienced significant growth. And today, our capabilities, expertise and reach are unparalleled. Our technological innovations and global manufacturing and supply networks position Orica at the forefront of the industry, making us a reliable provider for our customers across the world and the global market leader. Blasting Solutions represents the current core of our business, leveraging our unmatched industrial footprint. We operate five continuous manufacturing plants that produce ammonium nitrate in strategic locations throughout Australia, the Asia Pacific region and North America. Additionally, our 20 discrete manufacturing plants are located worldwide. Over the past years, we have upgraded our discrete manufacturing plants to produce electronic blasting systems in all regions, providing Orica a unique advantage to capture the continuous growth in demand for these technologies. And finally, our technology centers are strategically positioned in key locations in Australia, North America and Europe. The resilience and adaptability of our supply chain offers numerous benefits, particularly the security of supply, which is crucial for our customers' operations. We ensure this security even during global turbulence. We are also assisting our customers in meeting their sustainability obligations, which has become increasingly important today. Safety is our top priority at Orica, and it's equally important to our customers. We focus on the safety of our people and contractors, our customers' people, the communities, the environment and the preservation of cultural heritage. Safety is also a key consideration in the development of each of our technologies, and we aim to minimize risk and remove people from harm's way as much as possible. Everything I've mentioned so far is attributed to our people. Our diverse team comprises more than 14,000 individuals across the world with a significant percentage being operational and/or on site. Our team possesses exceptional technical expertise, enabling our customers to achieve improved productivity and efficiency, precision in the blast and most importantly, safer outcomes. In the next slide, we will look at global market trends and the outlook for key commodities. The outlook across key commodities is strong with demand remaining positive. Our business is well diversified by region and commodity, and we have increased our exposure to high-growth commodities such as copper with an increase of 14% to 23% of our revenue over the last 10 years. Positively and over the same period, we have reduced our reliance on thermal coal from 26% to 14%. The decline in thermal coal is expected to take longer than initially thought with potential reduced pace of energy transition further supporting the positive outlook. The ammonium nitrate market remains tight due to geopolitical tensions, trade restrictions and supply chain disruptions, which have collectively constrained the availability of ammonium nitrate in the market. Given the global uncertainty, ensuring the security of supply for our customers continues to be increasingly important. Deeper mines and lower ore grades, increase in technical requirements and protecting the license to operate of mines around the world are the key reasons for increased demand of our premium products and technologies. As mining operations become more challenging, the need for advanced technologies and premium products to ensure efficient and compliant operations becomes even more critical. Turning to the next slide. The ever-present push for productivity and efficiency improvement is becoming more pronounced as our customers face increases in the total cost of ownership. Mining and mineral processing have become increasingly complex. At a time when productivity and sustainability targets are constantly evolving, determining the best path to elevate an operations performance can be challenging. Several factors impact the total cost of ownership for our customers, including reducing ore grades, higher strip ratios and the need for mines to push deeper to find ore and minerals. And all these significantly affect operational costs. Additionally, increasing labor and supply chain costs and rising energy prices contribute to the challenge. Orica has been dedicated to helping our customers reduce the total cost of ownership for many years. We have a proven track record of bringing solutions to the market that enhance recovery and mining productivity. However, Orica solutions extend beyond blasting and deliver value across all the value chain of mining. With blasting at the core of our business model, our new technologies and solutions enable the industry to think and mine differently, operate more efficiently, precisely and responsibly. Currently, we are focused on delivering solutions that remove people from harm's way and drive productivity across the mining chain. Our blasting solutions are automated, digitized and connected, providing actionable data and insights for our customers to improve downstream benefits. Turning to the next slide. In recent years, our continuous investment in technology and innovation has resulted in a search of new solutions. Our primary goal has been to eliminate or reduce safety risk for our customers. We also aim to leverage our technology to improve social and environmental outcomes. Importantly, our advancements across the mining chain are enabling an integrated digital workflow from mine to mill, enhancing productivity. Angus Melbourne will be later on sharing a couple of examples of integrated value across the segments presented in this slide. This integrated approach allows for a seamless data flow and real-time decision-making, which significantly improves operational efficiency. Additionally, we focus on precision across the value chain to achieve better recovery rates and reduce energy usage for our customers. By optimizing blast designs and utilizing advanced monitoring systems, we can ensure that each blast is executed with the highest level of accuracy, leading to improved resource recovery and reduced environmental impact. In 2017, we released the world's first wireless initiation device, WebGen, which has unlocked unprecedented opportunities to improve productivity and recovery, offering our customers greater flexibility in blasting and mine planning while enabling new mining methods. This groundbreaking technology eliminates the need for physical connections, reducing the risk of misfires and enhancing safety. Importantly, WebGen is a key enabler for mining automation. Our innovative 4D bulk system is delivering remarkable results for our customers globally in both underground and surface operations. I will elaborate more about this system in a case study later on. Fortis Protect is part of Orica's commitment in developing innovative solutions that address environmental and safety challenges in the mining industry. On an earlier slide on the customer challenge, I highlighted that sustainability was a key focus area for our customers. By leveraging advanced surface chemistry with docking viscosity, Fortis Protect helps to mitigate the environmental impact of blasting and ensure compliance with regulatory requirements. This product was developed by our people in North America in response to customers' needs. The demand for this product continues to grow across regions and is a great example of customers collaboration. We are confident that these benefits will continue to expand as we grow and our customers expect more value from these systems, benefiting from Orica's unique integrated offer that covers from ore body intelligence to blast design and execution, monitoring and Geosolutions. Moving into the next slide. So let me share the 4D case study. The 4D underground system is revolutionizing underground operations, offering numerous advantages over conventional blasting methods. This innovative system, a global first in the underground space allows for the delivery of tailored energy outputs across blast holes, optimizing energy distribution and improving rock fragmentation. As said, the benefits of this technology are multifaceted, including the energy distribution, deliver superior rock fragmentation while reducing waste rock dilution, resulting in higher ore recovery rates with lower operational cost. The capital investment required to strike finite ore deposits is significant, and our 4D trials have demonstrated that this system can maximize ore recovery. At MMG Dugald River mine, the 4D system boost average stope recovery from 90% to 95% in fully compliant stopes. This translates to an annual increase of about 10,000 tonnes of zinc metal, worth just about $23 million in additional net smelter returns. The automated nature of 4D when combined with our Avatel system offers significant health and safety advantages by reducing manual task and operational reworks. The 4D systems integration with advanced digital technologies allows for real-time monitoring and data analysis, providing valuable insights that help optimize blasting operations. This data-driven approach ensures that each blast is tailored to the specific conditions of the mine, maximizing efficiency and minimizing environmental impact. By leveraging these advanced integrated technologies, Orica is able to offer a comprehensive solution that addresses the unique challenges faced by our customers in the mining industry. Moving into the next slide. Technological advancements are continually reshaping our industry, driving it towards greater safety, efficiency, recovery and social responsibility. As mentioned before, there is a growing demand for innovative solutions as operations seek to support this drive and enhance real-time decision-making across the value chain. I also spoke earlier about our innovative 4d bulk system. And as you can see on this graph, it has achieved approximately 300% CAGR over the past 3 years, supporting our growth in forward-facing commodities. Our proprietary wireless electronic system, WebGen, continues to lead the market with a 55% CAGR over the past 3 years. Fortis Protect also continues to resolve sustainability challenges in an increased number of mines around the world. These are just a few examples of Orica's unique integrated systems and solutions. The growth shown in the display slide supports our view that our customers continue to extract increasing value and insights from these technologies. We're a customer-centric organization, and we will continue to respond to the changing needs of our customers and industry. As a result, customers in more than 100 countries prefer to do business with Orica. In a recent survey, our customers highlighted the aspects they value the most in the relationship with us, our unwavering commitment to safety, continuous technological innovations, our reliability of supply, high-quality products and a strong sustainability focus and probably more importantly, our willingness to listen, understand and act to solve the challenges. Testament to our strong customer relationship is our Net Promoter Score, which continues to increase year-on-year, indicating high level of satisfaction and loyalty among our customers. By placing our customers at the heart of our innovation and technology, we believe we can make a significant impact in the industries we operate and create a more sustainable and prosperous future for all. And for you, the shareholder, this translates to a healthy contribution margin. Finally, to our key growth drivers on the final slide. We draw on our 150 years plus of innovation as we continue to invest in technology to solve our customer challenge and position Orica for growth beyond blasting, becoming the global leader in each of our business segments. Our rich history of innovation and customer centricity has laid a solid foundation for our current and future advancements, enabling us to stay ahead in a very competitive market. With our unmatched blasting products and technologies that offer higher energy and enhanced control for deeper and harder rock operations, we are helping our customers achieve safer, more efficient and sustainable operations while continuing to supply best-in-class support. As a reliable and trusted partner for our customers around the world, we continue to leverage Orica's strategic capabilities as well as our global manufacturing and supply chain networks to enhance our resilience and provide a greater degree of certainty over our customers' security of supply regardless of the location. We have implemented robust strategies to navigate market fluctuations and geopolitical uncertainties, ensuring that we remain a dependable partner for our customers. Our ability to adapt and the positive outlook across all segments, the ongoing global demand for our premium products and technologies and a continuous focus on commercial discipline will keep building a flexible and resilient business with a strong quality of earnings. But maintaining a strong focus on these core principles, we are confident in our ability to deliver long-term value to our shareholders and continue to the sustainable growth of the mining industry. Thank you, and we'll move now into Angus Melbourne with Digital Solutions.

Thanks, German, and thanks, everyone, for your time today. As you'll see and hear today, and I'm immensely proud of what we've pulled together at Orica, we are developing tomorrow's technologies today to address the challenges now and into the future. We're at the forefront of efforts to offer real-time insights that enable smarter and faster decision-making in blasting and beyond blasting. Whether we're optimizing a blast, protecting the environment, identifying the most efficient mining methods or monitoring critical infrastructure, such as a tailing dam, a pipeline or a bridge, our customers are empowered through digital technologies to achieve success in ways not previously possible. Now turning to the next slide. Sanjeev mentioned this morning some of the macro drivers behind the business, production, efficiencies and ESG. And this is particularly the case with Orica Digital Solutions. The growth is fueled by increasing demand for data, insights and assurance across the mining and civil infrastructure sectors. Now while demand for gold, copper and other base and battery metals increases, existing shallow deposits in established mining jurisdictions are becoming exhausted and grades are declining. The extraction and processing of ore is becoming more complex and more difficult. Mining is getting harder and mining is getting more expensive. In parallel, under increasing license to operate pressures, miners and civil asset owners require an increased focus on geotechnical health and geotechnical health of their critical infrastructure. So we've aligned our offering accordingly into three high-growth, high-margin businesses: OreBody Intelligence, Blast Design and Execution and Geosolutions. Each of these businesses provide advanced sensors for operational insights, software solutions that transform data to intelligence, optimization to create value for customers and connected workflows that sustain the benefits. So following the presentations, you'll have an opportunity to experience the technology in each of the three businesses in our digital solutions showcase. Now I'd just like to briefly explain each of the three businesses what they do. So starting with ore body intelligence. It provides measurements and critical information about ore bodies to enhance the understanding of resources. It assists our customers in identifying the location, the hardness, the grade, the quality of the ore body beneath the earth surface, allowing for more precise resource modeling and optimization of the extraction process. Blast Design and Execution digitizes mine operations, providing timely insights throughout the blasting process to optimize grade, recovery and throughput. This goes beyond the detonation. It ensures the best outcome for every operation. The interconnected workflows and dashboards enable the customers to plan the blast, execute the blast and then analyze and optimize the next blast. Now for Geosolutions, geotechnical monitoring is critical to track changes in ground conditions that could impact the safety and cost of mining operations and civil infrastructure. Specialized geotechnical sensors, and you'll see some of them today, are installed into the ground or on surfaces to measure movement, settlement, tilt, strain, water pressure and vibration. Other sensors measure surface deformation from a distance using ground-based radar and satellite. These sensors are typically networked and provide real-time information to manage risk. Now by combining GroundProbe with Terra Insights, Orica's Geosolutions portfolio offers the largest and broadest range of geotechnical instrumentation and end-to-end monitoring solutions to our mining and civil infrastructure customers. The group encompasses 6 of the world's leading instrumentation and monitoring brands, GroundProbe, RST Instruments, Measurand, 3vGeomatics, Syscom and NavStar. Our mission is to monitor and mitigate risk by delivering critical data and valuable insights. Now with an unrivaled position across three categories, Orica Digital Solutions has the potential to gain share in expanding markets with EBIT projected to grow at low double digit per year over the medium term. Turning to the next slide, please. Orica Digital Solutions operates globally, positioned to serve both mining and civil infrastructure customers with sensors, software, services and support across now more than 400 locations. Our tech centers are strategically located in key regions, including Australia, Canada, Chile, Switzerland, India and the U.K. Our manufacturing facilities are in Australia, Canada, the U.S., Switzerland and the U.K., while monitoring centers provide 24/7 coverage from Indonesia, Chile and Brazil. This is a substantial enterprise we've built here. The Orica Group's position operating in over 100 countries provides a channel for further Orica Digital Solutions growth into new geographies. Now for example, Terra Insights has a strong presence in North America, but really limited position in Australia. And Axis Mining services has a strong position in Australia, but a significant opportunity to continue to grow further in the Americas and Africa. The global network of infrastructure and innovation here allows us to address the diverse and evolving needs of our customers in both mining and civil infrastructure across all the regions around the clock. Turning to the next slide, please. Now over the past 7 years, we've developed and acquired a comprehensive portfolio of technologies that span the value chains of mining and critical infrastructure monitoring. Major acquisitions, as you well know, include GroundProbe, Axis Mining, OREPro 3D and the Integrated Extraction Simulator. Internal development in parallel of sensors, software and data analytics, AI and blasting solutions has been going on. This combination of organic and inorganic growth has resulted in an unrivaled offering across our target markets. Now while this may appear to be a complex portfolio of capabilities, together, they provide the data insights, data and the insights and assurances our customers need to address the increased complexity and challenge of extracting ore and monitoring the health of critical infrastructure. Axis, which forms the foundation of our OreBody intelligence business, has performed well in a difficult exploration down cycle. We've been holding ground in the base business while establishing new position in the Americas, Africa and Europe. We've also been busy during this time advancing Axis technology and focusing on applications, particularly into production workflows. This has resulted in several exciting new product releases this year in time for what we hope is some increasing optimism for exploration drilling activity. Now Leigh Rigg will have more to say on this during the technology showcase. Our recent acquisition of Terra Insights in March of '24, combined with GroundProbe has now created the largest and most diverse range of geotechnical instrumentation and monitoring solutions for mining and civil infrastructure applications. This strategic expansion not only enhances Orica's capabilities beyond blasting, but also extends our growth trajectory beyond the mining sector. The integration of Terra has progressed at pace, and the business is performing comfortably ahead of the investment case. Turning to the next slide, please, which is Page 38. I'll just give you some quick updates on the acquisition integration. The acquisition was completed in March of last year. Now integration with GroundProbe has been the focus, and this is to create Geosolutions. Now it's progressed to plan with most work stream tasks completed and the remaining one set for completion by year-end. The priorities for the integration program has been to quickly establish and incorporate Orica's safety culture and to combine Terra Insights with GroundProbe to create a unified entity called Geosolutions. The rebranding of Geosolutions will maintain key product brands such as GroundProbe radars, RST piezometer within the hierarchy to ensure that the brand equity is preserved in our target markets. A key focus has also been on aligning and incentivizing the marketing and commercial teams across the Orica Group to achieve the revenue synergies. This involves creating detailed cross-selling strategies and geographic expansion plans for each region. Additional achievements have include meeting the cost synergies, improving IT and cybersecurity and integrating financial systems. Efforts will continue to enhance efficiency and management, including sales, processes and IT business systems. This acquisition aligns with our growth strategy by geographically expanding Orica Digital Solutions, providing additional value beyond blasting and positioning for market expansion into the infrastructure sectors. Now turning to Slide 39. Orica Digital Solutions now operates beyond blasting across the entire mining value chain. Our geotechnical offering also now extends beyond mining to civil infrastructure. Our software platform, which is open, secure and connected uniquely positions us with this fragmented industry landscape. We connect customers' physical and digital worlds to help them understand and optimize operations from exploration to processing. Seamless connectivity and interoperability are crucial for our customers and partners. Being open, connected and -- being open and connected, security is important. And we manage our customers and partners' data to facilitate better decision-making. This data orchestration, however, must be managed with trust. Our platform is ISO 27001 certified, which is an international standard for managing information security on the cloud. This comprehensive approach means we're not just competing with a single player, but with multiple entities across a fragmented domain. Orica Digital Solutions stands out by providing sensors, software optimization solutions and connected workflows across both sectors to meet the growing data, insights and assurance needs of our customers effectively and efficiently. This unique offering and global footprint drive our go-to-market growth strategy. Firstly, to grow through cross-selling and geographic expansion; secondly, software-enabled recurring revenue growth; and finally, continued development of leading-edge technology to drive next-generation solutions. Turning to the next slide, please, on Page 40. I'd now like to illustrate how Orica Digital Solutions is helping our customers. In the first example, by connecting data and insights through integrated workflows to physical operations, in the second, by combining measurement capabilities to create unique solutions. The first example illustrates the value of connecting ore body intelligence into blasting. Using our RHINO drill-based geophysical sensor, we measure high-resolution rock strength in real time while each production hole is being drilled. Now this data generates a 3D model of rock hardness, which enables us to do significant downstream optimization. Rock hardness is a critical parameter, both for designing a blast and for downstream processing. Our BlastIQ software can automatically ingest this high-resolution ore body data and adjust the blast design tailored to each blast hole. Orica's 4D bulk systems can then be used to customize a wider range of energy matched explosives at each blast hole. At one of our customer sites in Latin America using just the RHINO sensor, the site was able to change its blasting practices, resulting in a 9% optimization of explosives while maintaining the fragmentation profile required by the processing plant. And from a safety perspective, less particulate matter was generated with the blast, which reduces workers' exposure to silica. The site is now looking to further optimize their processing operations, which is often the highest cost for the mine. Turning to the next slide, please, on 41. And this is a second example and illustrates the value of combining Geosolutions measurement capabilities. A global gold mining company engaged Geosolutions to monitor their tailings dams at multiple sites to mitigate potential -- to mitigate a potential safety issue across EMEA, Latin America and AUSPAC. The Geosolutions team stepped in with an integrated approach deploying both 3vG InSAR satellite-based radar services and GroundProbe ground-based radars. The 3VG service provided site-wide monitoring for early warnings of potential risks. Zones of interest were then monitored in real time using GroundProbe precision radar, supported by Geosolutions technical services. The benefits of integrated monitoring solutions included an early warning system provided by the 3VG satellite-based radar service, which then enabled early detection and potential risks and then some proactive management. The GroundProbe-based ground radars offered continuous real-time data to confirm and monitor those risks. The integrated solutions streamlined data collection analysis. It simplifies the information for site and makes it easier for them to understand and act upon. Consequently, this informed decision-making process led to a significant reduction in the site's overall risk profile. And turning to Slide 42, please. To conclude, I'd like to summarize the key drivers of growth for Orica Digital Solutions and our go-to-market priorities. As demand for gold, copper and other base and battery metals grows, the extraction and processing of ore becomes more complex and license to operate requirements necessitate comprehensive monitoring of critical infrastructure, the need for data for insights and for assurance across mining and civil infrastructure is only going to rise. Orica Digital Solutions is poised to support this demand with an unrivaled offering and a presence across both those sectors. Our platform, which is open, secure and connected uniquely positions us within a fragmented industry landscape to provide the right intelligence at the right time to improve decision-making and to optimize outcomes. Our unique capabilities and position underpin our go-to-market strategy. Firstly, cross-selling and expanding digital solutions product lines geographically, leveraging Orica's unrivaled global footprint; second, growing subscription services and software sales to build on our existing base of recurring revenue; and finally, rapidly developing and commercializing cutting-edge technology to bring industry-leading solutions to our customers. Thank you. And I'll pass you off to Rachael.

Thanks, Angus. Hi, everyone. I'm Rachael Sandel, Orica's Chief Information Officer. So my role is overseeing the strategy, execution and operation of our internal IT business systems globally and ensure that Orica continues to securely run and service our customers. I also jointly lead the data analytics and AI team, which I'll talk about some of the really exciting progress we've made to date in AI and also our technology modernization efforts across the enterprise. So Orica is very uniquely positioned to realize value from the investments we've made in modernizing our technology and internal platforms and rapidly respond to the advancements with AI. Our capability is underpinned by four key pillars. We've invested in modernizing our IT foundations. We've fostered the right partnerships. We have the right people, the culture and the governance in place, and we operate in mining environments, which provides us very privileged access to unique data and technology to deliver more innovation with AI. So today, I'm going to share how we're leveraging these pillars across Orica to make smarter decisions, simplify everyday tasks and make our people safer. Technology is the heart of what we do at Orica, as you would have heard today. We strive to be future-focused through simplicity, standardization and staying secure. Orica has modernized our technology systems to enable work to be performed from anywhere around the world anytime securely. The transformative step in 2020 was our SAP -- Orica's global adoption of SAP, which supports unifying operations of over 100 countries, creating transparency for decision-making and increased business agility through this platform. This program consolidated our entire global business processes on an SAP S/4HANA core, integrating it with seven SAP cloud products to unify our global business processes into a single instance of data from HR to marketing, supply chain, commercial, financial processes and the complete asset management life cycle. This system manages it all. Standardizing processes, system data and reporting enables us unparalleled visibility across the Orica business, allowing our management to make better real-time data-driven decisions. Despite some of the challenges with this global large-scale adoption of SAP with this transformation at the time, it has streamlined our operations. It's enhanced our efficiency and agility as a business, and now it can be enhanced even further with artificial intelligence. So Orica is positive that this platform has ongoing benefits allowing work to be executed from anywhere, whether it's in the field or from our global business services centers, which I'll talk a bit more about later. Our SAP transformation embraced a cloud-first strategy. This served as a catalyst to migrating all of our technology platforms to secure by design cloud infrastructure. Initially, when we went live, SAP was hosted on Microsoft's Azure Cloud. However, last year, we transitioned to Google Cloud for our SAP Instance. With more than 5 years of multi-cloud experience, Orica leverages the flexibility of the cloud to choose the best hosting provider based on cost, security and the innovations available. The shift of SAP to Google Cloud has now unified our enterprise data integrated on this Google platform, creating an intelligent data warehouse. This combination on the Google platform allows us to bring AI to our data across SAP and other data sources and unlock value, transforming this data into actionable insights. Cybersecurity, as you've heard about today, remains a top priority for Orica, and Orica continues to uplift our cybersecurity controls and respond to new threats to ensure we maintain a resilient organization. We have partnered with industry-leading cybersecurity partners to enhance our incident detection and response capabilities using AI-enabled platforms to make sure we secure our data and our customers' data. Additionally, we've also done a lot in terms of modernizing our workforce collaboration and digitizing these workflows across IT, HR, legal and other corporate services via a centralized ServiceNow platform, which all employees can access for any query. To illustrate the benefits that we have seen from SAP data enabled by our Google Mauve and AI, I want to share an example use case of how we're bringing AI to our SAP data and how this is supporting demand planning at Orica. With this SAP data, we've been able to train our own custom AI models to improve our ability to forecast customer demand for products. We've started with our North America business. Together, this AI model that we've built in-house has 50,000 machine learning models predicting every type of demand for every possible SKU combination. Orica's custom-built AI model outperformed all other solutions that we tested. This includes the human-built statistical models and 7 off-the-shelf AI products. So to date, we have achieved a 10% improvement on sales forecast accuracy. This means fewer missed revenue opportunities and less unused inventory on hand, and this is evident in reduced days on hand in trade working. So first, we're using AI on our EBS product SKUs for North America, but you can see the potential here, and we plan to expand this out across other products to other regions. And this is an example of how AI capability on Orica's data is generating real value. Let me talk about the people, culture and governance. As a company, we've always fostered a really rich culture of data innovation and technology, but people are at the core of our business. It's part of Orica's DNA. The modernization of our technology, including SAP and the transition to cloud has facilitated work to be performed from anywhere, any location and then the global talent acquisition. 6 years ago, IT, my team began with a 24/7 multilingual service desk and SAP operations centralized in Manila. More recently, we've enhanced our stack center of excellence based in India, tapping into the rich experience and talent pools of SAP skills that India has to offer. This has been advantageous for IT, supporting our global workforce with Manila and India now my biggest resource hubs. Beyond IT, Orica has also expanded the global business services operating primarily in Manila. Now it employs over 570 people across HR, finance, supply chain, commercial support and other corporate services. Work from anywhere has been enabled by SAP and digital technology, which centralizes activities and processes that were once globally distributed to support our operations. Now to AI. We recognize the importance of building our own internal capabilities to harness data analytics and AI. Last year, we rapidly formed a central team by leveraging existing expertise such as engineers, data modeling experts and talent from some of our homegrown talent from those who've worked in our digital solutions products such as FRAGTrack and Design for Outcome. These products have been on the AI journey since 2019, and the talent availability of people that have worked on these products is very unique to Orica. The team's goals is to generate value far above its investment. The goal I've set the team is to deliver twice as much value as this team costs in 12 months. So to manage the risks and opportunities presented by AI, Orica also launched a global AI group standard about a year ago. This ensures responsible use of AI systems and compliance with the evolving regulations across the world. We understand that the best AI opportunities come from across the business. So governance forums we've established such as the AI center of excellence unifies the business line expertise and works collectively to prioritize the most promising AI use cases based on the business case while protecting our sovereign technology capabilities in this area. So partnerships. To augment our internal capability, we've also found it very important to form the right partnerships. These partnerships amplify what we can do and the speed that we're able to do it. We continue to strengthen strategic technology partnerships with the likes of Google, SAP, Microsoft, UiPath for Automation and ServiceNow to access the best-in-class cloud-hosted services, AI capability and automation. It also means that we partner with academia, including MIT in the U.S., Queensland University of Technology in Australia, just to name a few. These partnerships allow us to accelerate our ability to solve Orica's specific problems whilst building a future talent pipeline for the future. We also very closely monitor potential disruptors in this space, partnering with start-ups to the large-scale hyperscalers like the Microsoft and Google that I mentioned to co-develop tailored solutions at the right price point. Additionally, it encourages some healthy competition. These partnerships are accelerating value creation without impeding our ability to create a sovereign AI capability unique for Orica. So the power of partnerships is going to be best illustrated by how Orica is leveraging generative AI. Our GenAI early -- GenAI journey started very humbly with the pilot of Microsoft Copilot 18 months ago. This is an out-of-the-box tool, which many of you might already have, and we rolled it out to our senior leaders and executives to improve daily productivity, and we saw that it saved 3 hours per user a month across e-mails and Teams meetings, all while protecting Orica's data through the engineered security controls on the Microsoft platform. Following that, Orica was then the first Australian customer of ServiceNow's generative AI platform. This AI-powered virtual agent now resolves 97% of the IT tickets it handles. It summarizes incidents from my team and has reduced my team's time handling tickets. We've also seen this GenAI deliver a 1.5-day reduction in average incident resolution time. What this means is fewer agents for the same volume and more efficiently solving our users' tickets across Orica. So while we've adopted out-of-the-box GenAI capability from our technology partners, we've also invested in building our own GenAI capabilities. Today, I'm proud to announce that we've got 7 GenAI models in production that leverage our data and perform services, which are tailored for the Orica business. These addressing a number of use cases from translating documents to drafting contracts. Let me touch on the translation example. Our GenAI translator has Orica domain-specific expertise and to date has saved over 17,000 human hours while only requiring a $5,000 investment, which is like the cost of 2 translations from a professional third party. So a great return on investment there. So these are a few practical examples of how the partnerships we have are creating value and where we're practically delivering generative AI to drive productivity in our business. Orica's privileged position with access across mining plus experience in drill and blast means we have a large access to the amount of lasting data. And this rich data allows us to use it for AI and automation to develop industry-leading solutions, which you in the room will see more about today. The power of this is really brought to life where in this use case, which I'm going to talk about, is bringing together Orica's unique data with our proprietary technology to use AI to improve safety controls, which are in addition to the engineered controls we already have on bench, such as speed limits on mobile manufacturing units. The on-bench environment, as you can imagine, is dynamic and hostile with large machinery and people working together to complete the loading process, making on-bench work one of our global major hazards. So I'm just going to play a video here for people in the room. And what you will see here is a bench hand working with our mobile manufacturing unit. There we go. In this scene, you can see boosters on the ground in yellow and how the bench hand will lower down the booster into the blast holes before the MMU moves in to load our bulk products. This is an example of a human and machine interaction. In many cases, there will be other machinery like stemming trucks operating at the same time. Can we get the video to play again? Sorry. Just please put the video back on loop. Thank you. So what you can see here is this solution requires far much more complex reasoning capability. The AI understands the dynamic scene, including the role of the bench hand and detecting the constant change of interactions that are happening. So as you can see, the AI vision model is able to track and semantically understand every object in the scene, including the human, the organ that's coming out and the blast holes, and it tracks these interactions constantly. So when the blast hole -- so when the organ moves, you'll see the AI demarcating the hazard area represented by those 2 blue lines. If the human walks into those 2 blue lines, it will have a warning. But if the MMU starts, it will trigger an alert to the operator. So what you see here is programmatically not possible to achieve without the power of Vision AI and the unique data that Orica is able to leverage. This vision safety system is in its pilot phase with several customers at mining sites and has really strong support throughout the regions. Orica's capability to develop advanced AI systems is foundational to underpinning our automation program in the future. There are more exciting technologies in the pipeline, which I will not talk about today, but this is a meaningful example of how Orica has brought together its people, its unique data to develop a sovereign AI capability that will impact the industry and improve safety of our people. So if I go to the last slide here, at Orica, we believe in the art of the possible with technology. And of course, I had to use GenAI to produce a bit of an artwork for this slide. But I really hope today has given you a glimpse into the possibility of what we can realize with technology and AI. We are really uniquely placed to realize meaningful value from these efforts, delivering smarter solutions, optimized operations. Orica's data is our unique differentiator. Nobody else is in such a privileged position with our access to rich data from our years of our own technology and on-bench experience and access to mining. For our enterprise, we've connected our core business processes into a single source of data with SAP at the core and continue to digitize our corporate internal services, allowing work to be performed from anywhere and that access to that rich talent availability across the world. The richness and the access to the data that Orica has brings unparalleled opportunity to drive further productivity and value with automation and AI. So is technology and AI living up to the hype? I'm certainly optimistic that at Orica, it will. Thank you.

Thank you, Rachael. Let's open for questions from the floor. And I think we've got one online, which I'll deal with later. Michael?

Michael Ward speaking. I've just got two questions. Firstly, for German. You talked about market tightness in AN. Can you elaborate on that a little bit, please, especially in the context of what may happen if we see peace in the Ukraine?

Sure. After the war of Ukraine and Russia, we saw a significant volume of Russian not flowing through the seaborne AN that has resulted in tightness in the market. We saw that dip in Australia, specifically in 2023 and 2024 or early 2024. We've seen some of that volume now being replaced by other sources. But as market continues to increase year-on-year, we see that tightness to remain present and visible across many jurisdictions.

Okay. And maybe just a question for Angus. You talked about double-digit EBIT growth in the medium term.

Low double digit.

Okay. Yes, let's call it. Is that going to be a story of revenue growth matching that? Or is it going to be a story of margin expansion? And how should we think about that? And how should we think about -- like if I just look at the history of what you've delivered in Digital Solutions, there's been a bit of variability in the earnings. I personally don't understand what creates that variability. I was just wondering if we're going to -- if we'll see with the new more integrated platform, if we'll continue to see variability in the earnings moving forward.

Yes. I think there's an issue of scale here as well, right? So if you look at the components of the business, they're at different degrees of maturity and scale. Some of them more in an earlier start-up profile, for example, in OBI. And that does have an impact as we first deploy the technology and then we start to scale it up. Then you have businesses like Geosolutions, which are more at scale. So I think the short answer is the earnings volatility will reduce as we expand and start to build some scale and critical mass into the business. And it will be underpinned -- the growth will be underpinned by top line growth.

So we wouldn't expect margin expansion or you'd expect...

I think the margin ranges we've guided to is where we'll see the business over that midterm. We still need to invest in technology. We still need to -- we're deploying hardware as well as software. I think there's an opportunity for some market expansion in -- particularly in Geosolutions in the Geotech part of the business because there's an opportunity to grow recurring revenues, particularly in the Terra Insights part of the business.

I got a question from Owen.

Owen Birrell from RBC. I'm just trying to, I guess, marry up the aspirational targets that you've put out there. You've called out effectively, all else equal on blasting solutions, about a 5x increase in your non-blasting earnings over what you've defined as, I guess, a midterm outlook. You've also called out low double-digit EBIT growth in the blasting -- the digital solutions and then low -- mid-single digits in specialty chems. Even if I take a 20% growth CAGR, it's going to take you over 10 years to get to that, assuming Blasting Solutions doesn't grow at all. So what am I missing here?

Owen, I would suggest don't do math on it. I'm starting to regret the fact that we told you what our strategic ambitions are. Yes, you're right. If you do the math, it's going to take a long time, but we are here. We're not going anywhere, right? You need to understand this, and then Michael, back to your question, we are inventing an industry that didn't exist 5 years back. If you tell me what the potential is, ask me, I don't have an answer. And also remember that we are working with an industry that is extremely conservative, extremely conservative. So I always joke with Angus and the team. We don't compete with competitors. We compete with our customers because they have these old archaic systems from 20, 30 years back. And we have to go and prove to each and every one of them that we are better. And in some cases, it leads to write-downs and how difficult that can be when we tell them that your system is scrapped and we got something great here. The reluctance to try stuff means that it's a hard sell. The sales cycle is not very short, but convincing people to pay us and try those products and solutions that help them to improve productivity. And once you get there, you see the stars in the eyes and then it scales up pretty quickly, right? So yes, we will have top line growth. We will have margin growth. We are launching on an average, what, 2, 2.5 new solutions per month in the digital business. Because all you have to do is take one product, take the other, put it together, go to a mindset and ask them what are your 2 top problems and come with a value proposition because we can do it. So we are building an industry and a market that didn't exist a couple of years back. So the potential is massive. But it's a very conservative industry, and there's trials and trials and then they have to go through a tender process, even though there's nobody else offering that. And so we have to go through the pain of getting everything done, and then we start to see the scale coming in. But that's been the nature of this industry for. But if you take an example of EBS today, we talk of EBS as if it's there. It took us 25 years to scale up EBS to where we are, 25 years. It's a no-brainer technology. So it took us 25 years to convince customers, this is the right thing to do.

So it's fair to say you've previously ruled out sort of major acquisitions in terms of delivering some of that aspirational target. Is it fair to say that the greatest opportunity for growth in that aspiration are really the markets that you don't even operate in yet, such as you talk about civils and infrastructure, those markets that effectively at this point don't exist.

For sure. That's a new opportunity. That's a market we are learning as we speak. We do have the Q&C business and the tunneling business. We are #1 in the world in that. But big infrastructure projects, that's where there's massive opportunity. But don't forget the mining industry. As I said, it's a very archaic operation. So you go down to a big mine, Rachael talked about it, right? You've got the big dump trucks, you've got the load and haulers, you've got our blasting trucks. And if you ask the miners, you have one wish that I can grant you, they'll tell you, get out of the way. The blasters, we are asked to get out of the way because we are a nuisance to them. So our technologies are finding a way for us like wireless, drop and go, go right over and do what you want, get out of the way. That's the value proposition for a miner because then we do not interrupt their workflows. So we are a nuisance to them, a necessary evil. Without us, they can't mine. That's clear. But we create a lot of problems. We want to have safety distances. We will have to isolate the sites and there's a blast every all other work stops. So we create interruptions to a mine process. So they tell us, can you get out of the way, please? Do your thing, but we don't want to see you. And that's when all of these technologies are getting us to. But again, it's a massively, massively conservative industry. It takes us a long time. It can be a bit frustrating. But again, once we have a win, they talk about the product. All these testimonials we have shown, it's not us. They talk about it. Go to a mining conference, and you'll see a customer talking about a product or solution that we've offered them. We don't tell them to do this. They do it themselves. And that's when the pull effect starts because once somebody has it, so another principle in the mining industry is we will be second. We'll try it second, go somewhere else. We don't want to be a pioneer here. So those are the kind of barriers that we are going through. So yes, civil is a massive opportunity for us, but the mining industry is, again, a huge, huge opportunity for us to grow. And again, on specialty mining chemicals, we are not done, right? What we have in gold, I'd like to see in copper someday. So the potential is huge. And why is the 10-year, 15-year time frame that you talked about very important for us? Because I know and we all know that in 10, 15 years, coal is going to die. We know it. So what are we blasting? Single biggest commodity on earth is going to shrink. We all understand and accept that. Maybe it takes 20 years. We are preparing today for what's going to happen in 20 years. So if we can get the 50-50 in 10 years, I think it's a massive success for us. I'm sure we get it earlier because we've got plans, right? But don't do the math on this because we have not yet had every building block we need to reach there. We are inventing an industry as we go. That's what pioneers do.

Just a couple of questions for Angus, if I could. Just firstly, you mentioned software and subscription revenue before, what's your current sort of percentage from those sources? And where could that get to?

We give a whole of group, and it's sitting around the 2/3 mark at the moment. I think this -- the big opportunity, I alluded to it earlier, is in Terra, which we're calling GS5, by the way now. We've retired the Terra Insights brand. It will be Geosolutions, but the subset we call GS5. The opportunity there is that if you look at what we've done, first of all, in blasting with BlastIQ, we created the platform, the OpenSecure platform. We connected and integrated workflows onto that. If you look at GroundProbe, it's a similar story. David and his team have built up a monitoring capability, connecting data all back into that single source. Now if you look at the Terra business, it's largely instrumentation with a smaller component of monitoring and software. And that industry is very fragmented. There's a lot of instrument providers. There's other players that are trying to be aggregators, but they don't have the domain expertise. The reason we're successful in blasting, the reason BDE has grown rapidly is because we're Orica because we're the largest single blasting channel, and we have the blasting domain expertise. We see the same opportunity in geotech that we can be not just a provider of instrumentation, but domain layer applications on top of software. So that's why we're investing in software. We're investing in the platforms, and we're focused on trying to build that software part of the business.

So John, I'll give you another example of going back to Owen's question as to what we are developing, creating an industry as we go. The single biggest risk in the gold mining industry apart from safety and fatalities is leach pad failure. So if you heard of what leach pad failure is, that's when the so-called dam, where we have the spent acid and the waste fails and it destroys the environment and the surroundings. Single biggest risk that gold miners have. And we are part of that challenge because obviously, our sodium cyanide residue also sits in the leach pad. At the moment, the solution is try to monitor the best, do something with it and try to ensure it doesn't fail and then hope for the best. So in an average, in a year, we have 3 to 5 such major incidents and hundreds of minor incidents of leach pad failure in the gold industry. And you lose your license to operate. So we are now working Geosolutions and sodium cyanide, especially mining chemicals to come with a monitoring solution for leach pads. So you can predict that this thing is going to fail. You better do some maintenance work. And when it fails, it sounds an alarm. Now that's ground probe in mining, different application, potential, massive market size, I have no idea. What are you willing to pay to ensure that you don't kill people, destroy the environment and lose your license to operate? That's a strategic relevant market. So if you are successful, no pressure, Andy. We'll be selling sodium cyanide. We'll be selling the scientific product, and we'll be selling leach pad monitoring, different value proposition. Nobody else does this. It doesn't exist today, that technology. So it's huge potential. How many leach pads do we have? Hundreds of them all over the world. Not a single one is monitored the way we could a tailings dam, right? Today, it is mandated after what happened in Brazil, and you saw the impacts here, $40 billion. The tailing dams must be monitored. The next step is leach pads. So it's coming. It's a massive new market for us. It doesn't exist today.

And just the second one, and I think you've sort of partly answered it just then. But obviously, digital is a sort of a mix of preexisting Orica businesses and acquisitions. And I appreciate it's evolving. But just be interested in sort of where do you think you are in terms of pulling all of this together. And obviously, it's sort of work in progress and obviously capturing that value from the whole. I mean I suppose the essential question is based on what you've seen from customers in the last few years, I mean, is the whole more than the sum of parts?

Yes. The whole is absolutely more than the sum of the parts. I think there's 2 steps that we've built scale into the business. We've also introduced quite a lot of new technology. I think there's a pivotal point that we're approaching where we're integrating ore body intelligence to blasting, and Leigh will talk a little bit more about that. But the ability then to -- ore body intelligence has been around for a long time. A lot of the -- and I actually take a lot of confidence from the fact that geologists and geoscientists have been asking for this data for a long time. But as Sanjeev said, a lot of the time, it's an interesting science project but get out of the way, particularly in production workflows. And I think if -- you'll see in our technology strategy that we've been focused on creating measurements and sensors, but we've also been focusing on deploying them in minimally invasive ways. So drill mounted, for example, or using automation systems so that we are not in the way. And I think we're at a point now where we're about to scale some of those technologies and then combine the integrated workflows into blasting, I think that will be a great driver of growth for us. And then on the Geotech side, I just alluded to it again, the opportunity to platform across the whole Geotech. Step one is bringing GroundProbe and Terra together, and that's advancing well. And there's some opportunities as we combine 2 businesses to drive synergies, both cost and revenue. We talked about those. But there's also then the opportunity to platform that and become a geotechnical provider of not just measurements and instrumentation, but also insights and data, replicating the success that we've had in the blasting domain. So it's not just about the technology, it's the combination of the technology with the expertise and the domain knowledge. That's what sets those businesses apart.

Question from Niraj.

Just a question on the Blasting Solutions side. There's a chart there that shows some pretty sort of healthy growth rates, whether it's different products or the contribution margin. But that's coming from a low base in that 3 years for overall Blasting Solutions is a significant repricing cycle and everything else. So I guess how should we think about profitability within Blasting Solutions going forward over the next, say, 3 years, given I think more of it is going to be driven by technology adoption rather than straight price?

German, you want to?

Sure. So the graph that you have there is that -- or at least one of the graphs, the fourth one that talks about 65% growth. This is around a number of technologies that encompasses a number of things there. And it's true that it is starting on a relatively low base simply because some of those products were launched relatively recently. The profitability that we have been showing in Blasting Solutions, it's contributed to a number of factors. The first one is that growth on technology, the integration with blasting and digital solutions and also a price movement on the commodities that we have been passing to the market. I think I was mentioning before about the AN market tightness and that market tightness obviously has resulted in more attractive prices for companies like Orica. I think it's a combination of all those things that comes into the volume mix that Jamie was referring before. We have seen substantial volume mix coming last year, and we expect that to continue in the next year.

Scott Ryall again. My question is actually for Rachael. So I don't know -- I thought your presentation deserved to spot up on the top there. I don't know how you're going to answer it, whether you need to get up there. But I'm wondering if you can give us a little bit more information, please, on your storage of data. You mentioned some Microsoft wall thing. Maybe you can just go refresh us on that. But how are you making sure that your data is safe, your analytics are safe and anything you do with any insights you get from AI remain within Orica only and not within the systems themselves, please?

Sure. Thank you for the question. So in terms of where our data is stored, Orica is predominantly in the cloud. So I'd say 95% of our systems and data are stored in the cloud. And we have the privilege of having over 5 years' experience, as I mentioned. And security in cloud has been one of the principles that we've designed in very early on. So when we moved SAP to Microsoft Azure Cloud, we built in security controls there. We then moved out -- exit our data centers and moved into AWS cloud at the time. And then last year, we moved into Google with our SAP environment, working very closely with the best and brightest from Google Cloud to engineer security controls upfront to make sure data is protected and our security controls are robust because at the end of the day, that is what the most -- security is the most important thing to us and making sure the security of our data, our intellectual property, which will be our competitive advantage in the future. So across those 3 clouds, having those security controls in place, that's primarily where our data is. And for the data and analytics, we do have some of the services based on Microsoft Azure. So some of the digital solutions products are in there. It was mentioned before, we have -- by Angus, we have the ISO 27001 certification to give customers confidence around our security controls in the cloud on our customer data side. And internally, we have been investing time and time again around our security controls and auditing them, whether it's in Microsoft, whether it's in Google. So we're confident in our security controls across those environments and making sure that we protect that information asset that we have across Orica. Hopefully, that answers your question.

If I can ask 2, please. I guess just trying to get a sense for the confidence on the double-digit growth on the digital side. Can you share any data points on the cross-sell to date in your success rates with customers, how that's looking? And then secondly, just on Axis, we are starting to see some green shoots on exploration. Can you give us a sense for the potential earnings benefit if we -- if that cycle improves or how material that could be?

Yes. I think I alluded to a couple of the areas already where we've had some quick wins. And the obvious ones are geographic, right? And again, if you look at the base business of -- in Geosolutions, the posture between or the footprint of GroundProbe versus Terra Insight. So we focus very quickly on how we can cross-sell, channel sell through the combined into new markets. So Australia AUSPAC is a focus for us, for Terra, particularly given the strong footprint that Orica and GroundProbe has. Latin America is a strong -- another strong GroundProbe area where we're deploying other geotech sensors through there. So those are the quick wins. And we're on -- we're essentially exceeding our targets on the revenue synergies that we've set ourselves. With regard to Axis, we're broadly in line with our investment case with the one caveat that we had modeled an exploration down cycle, and we've modeled that to happen around '24, '25. In fact, it happened a year earlier. So Leigh Rigg, who's part of the showcase is running that business, he moved very quickly to adjust the business to the cyclical downturn. And you're right, and I'll touch wood and we're cautiously optimistic that we are going to see some improvement in the exploration cycle through this year and into next year. And I think that will give us a strong platform to exceed the investment case.

If I can add to that, there is not a single mine in the world that is going to be easier to mine 5 years down the line, not a single one. They're all going to become more complex. And with complexity and a need for productivity, this is where the integration of our Blasting Solutions and digital solutions is attracting the maximum value.

Just to confirm your commentary on green shoots, Jan and Feb were our best ever months at Axis, best ever since founding, so not since acquisition, but since founding. But again, as Angus said, we need to see more capital flow into exploration, both greenfield and brownfield as well as the production opportunities that we have. We've launched a couple of very, very exciting new products. So we should see that scale up. Leigh outside at the booth will talk a bit more about it. It's really exciting. And then we talked about cross-selling, but also cross learning. So a significant portion of ground probe revenue comes from monitoring 24/7. So we monitor in real time the mine sites, the walls and the dams. And the customers love it because they can outsource that to us and then we offer them a service that is absolutely mission-critical and regulated. There's very, very little monitoring happening from the Terra businesses. They sell the sensor, they sell the data. They don't monitor. So if you go to a mine site or a retaining wall or to a dam, you'll have anywhere between 3 to 5 different service providers offering that solution. So we are working now on a common platform to integrate and start to offer monitoring as a new service, a new revenue and earnings stream for the Terra products. And for us, it's easy to do because we already have the monitoring centers and the people. We just have to build that data platform so that the data flows in real time, and then we can offer 24/7, 365 monitoring services in Terra, which doesn't exist today. So once again, a new opportunity to scale that business up. So the cross-selling, but also learning from each other and sharing best practices gives us a lot of new opportunities to scale digital up.

Jamie, there's a question for you, so I may just get the microphone to you. I just would like to paint some more color on Orica's plans on the debt side in this volatile market.

Yes, sure. I think the question was from Ashley. So thank you for the question. As I mentioned earlier, we're about to close a $460 million refinancing with our existing lenders for, I think, 4 and 5 years. We do have 2 small bonds that will be maturing in the next 12 months. We think that we can absorb those within our existing committed facilities. Later in the second half, we will probably go back to the long-term bond market to term out some of the debt that we took on for the Cyanco acquisition. And again, we think that having a commitment to a leverage policy will be helpful in that process. So notwithstanding the disruption in the global debt markets at the moment, we think we're in pretty good shape in terms of our debt book.

Thanks, Jamie. Let's take a break for lunch, and we have another session at the end.

One last comment because we really didn't discuss this whole AI challenge. And if you spare me 2 minutes. You hear a lot of hype, right? Everybody is talking about AI and big data. And I'll tell you what our journey has been, and I'll tell you why this is not easy. there are 3 things you need -- I'm not an expert, but I'll tell you our experience. Three things you need to start to monetize AI. First is obviously the right data, the common source of truth. And with our SAP investment, which was close to $0.5 billion, we today have one source of truth within Orica anywhere in the world, more than 100 countries, hundreds of legal entities, joint ventures, single source of truth at the press of a button. So that's the first requirement for anybody talking about or pretending to talk about leveraging AI, you need that single source of truth. Without that, it's garbage in, garbage out. That took a lot of effort, hardship, tears, capital until we got there. Secondly, you need to have that data, which you're generating every day and historical data, you need to have it up in the cloud, not on your on-premise service because that's not going to work. Single source of data on a single cloud platform. Once you have that, which again is a heck of a lot of work, investment risks because you don't want to shut your business down. Once you have that, then you need to build in a closed ecosystem. So we don't use ChatGPT. ChatGPT is banned in Orica because it's a public domain, whatever you put into ChatGPT can be read by anybody everywhere in the world. So we have banned ChatGPT within Orica. We have our own in-house tools, which are then accessing the cloud, the service to get access to all of the data that is there, millions and millions of terabytes and give us the value, the monetization. So it's not easy doing all of that. It needs a lot of knowledge. It needs a lot of investment. It needs a lot of capital, and then you start to build business cases where you start to monetize that. And I'll give you just one example, which is very interesting. We had this fatality last year, road accident in India, where our truck returning back from mine site was rare-ended and it toppled over. And we -- one of our colleagues passed away. And the reason was they were not wearing seat belts. So we couldn't have avoided the accident because it was rare-ended and it topped over. But if they were wearing seatbelts, we would have had a colleague still with us. So what they did, and we had the alarm system. We had all the controls and what it is they bypass that by putting the seatbelt behind their backs, so that the alarm wouldn't ring, right? So we said it's not good enough for us. Now we've got in-vehicle monitoring systems, cameras on all our fleet. So we went to the AI team, Rachael's team and Angus' team and said, give me a solution that will not allow these people to drive if they're not wearing a seatbelt. So today, the camera and the image is analyzed by AI in the cloud, and then it starts giving them a signal if the seatbelt is not across their shoulder. And it gets louder and louder until either you stop the vehicle or you put your seatbelt on. It's such a small thing, but it was impossible to do without having AI and the data. And what AI is doing is converting camera feed, so video feed into data and converting that into a system that's helping us to ensure that the thousands of vehicles that go everywhere across the world in all kinds of markets for us, the folks there are wearing seatbelts, right? So it's going to save lives for us now. So it does not have a monitoring value, but it's massively powerful in terms of the way we want to operate in our environment. Not many people can do this. So we've been talking to people like Toll, transport providers in Australia. They don't have this technology. That's what they do. Orica has. So now we are talking to see whether we can collaborate with them and help them because Toll is also moving our products around. And we don't want a contractor to lose their lives also, that's the beauty and the power of AI.

Okay. Thank you. So let's break for lunch. We'll resume at 1:15. So can I just remind you, your groups are on the back of your name tag. We'll start with the red and blue groups here on this floor. So there's 2 rooms here. And if you're green, it's just downstairs on Level 4. It's as exciting as the start of this day. There will be a 15-minute presentation by each of the booth owners and time for Q&As and you get to touch and feel some of the equipment. So there's equipment in the rooms as well. For those on the webcast, thank you for joining us. We'll resume again on the webcast at 3:15 for a close and a final Q&A session. Thank you. [Break]

So we're down to the last bit, and then we'll do some Q&A, and then we'll close for the day. So I hope that what I said initially in my remarks is that what we show you is the tip of the iceberg, and there's a lot more that's happening behind the scenes in the pipeline and all of that will come through. So I hope you did get a flavor. This is real. I mean we call it digital, but honestly, this is industrial tech. This is not the digital nonfungible stuff that we do. It's industrial tech. It's backed up by sensors, IoT, 5G and a lot of domain knowledge. And the other part that's -- I hope that comes out is that all of that business refers back to core blasting. It's always building back to core blasting where we are domain leader. We are #1 in the world. How can we add to that service offering, both upstream with ore body intelligence? And you've seen the gyros, you've seen the tech that we have there and then downstream in Geosolutions. And then a step further, obviously, with our chemical processing know-how and knowledge that we are building. So that entire integrated workflow offering is unique. And I can reiterate there is nobody else in the world who can offer what we do today. And customers have a choice of either taking the entire integrated offering from us or taking bits and pieces and integrating it into their own tech that they have in place or just handing it over to us and then we operate the entire end-to-end ecosystem. We've got everything ready. infrastructure is in place, people are in place and the business is starting to scale up, right? We'll see fast growth in earnings in digital business. We'll also see the scale-up effects in the specialty mining chemicals business. We'll see significant progress already this year, but then also '26, '27 and '28. It's really, really exciting. And it's a very sticky business. So once you're in a customer, and we've had examples of us operating on blasting competitors' mine sites, very successfully, and then that's the foot in the door for you. And once you're there, you're in and then you can start to scale your business up slowly but surely. So there's so many opportunities using the tools that we have that nobody else can offer, and we'll continue to build on this. We'll scale up the digital business as fast as possible. There's nothing holding us up -- holding us back. We've got the entire offering with us. I don't think there's anything that we miss. And today, with AI, we have the opportunity also to use AI to fulfill the gaps in our portfolio. We don't need to go out and buy another company. So that's really, really comforting and exciting for us. And with the specialty mining chemicals, obviously, the opportunities are quite clear. Gold is an exciting commodity, and we want to extend that experience and offering to other commodities. The core blasting business is running well. You will see the first half results in May, and then we can talk about the full year and the outlook. I'm optimistic on all the 3 segments. The teams have done an outstanding job. We've had a lot of success. I know that the write-downs were a bit of a disappointment. I mean we have a lot of legacy as an organization. We've been operating 150 years. And as things come to the surface, you can't look away. We have to take action. These are not easy decisions. We obviously have to discuss this in depth. We have to get the Board to sign off. But in the end, what we are trying to do here as a management team is do right by the shareholders and try to create value. You don't want to carry this burden forever because then that holds you up from doing more exciting things like new modern technology. So it was a difficult call in LatAm. But again, as I said earlier, we are highly committed to the business. The business has a lot of potential. It is just that we have to play to our strengths. Sometimes the challenge in Orica is we try to do everything for everyone. And we are all resource and time constrained, and that's not the right approach. So we're trying to focus ourselves to say, where can we get the most bang for the buck, literally, but also figuratively and see that we really generate value instead of just churning a big wheel and have nothing to show for it. And that's, in my view, is not the right approach. There's a lot of confidence in the strategy. We are 3.5 years into it. I think there's a bit of runway. We'll get there. And then hopefully, the aspirations will become facts and targets, and we can then provide you more numbers. I know that the business gets more and more difficult to model. Delphine will do everything they can to -- she can to help you. But it's all about mix and margin in the end. It's the quality of earnings. It's not about growing our tonnes. Honestly, we have no interest in growing tonnes. Why should we, right? It's all about growing our margins, our earnings, upselling, offering the premium products that we have in our pipeline and then cross-selling with the other 2 segments to bring value to our customers. That, in a nutshell, is the strategy. We've been successful so far, and there's a lot more to come after that. I'm sure you've got questions on any of the topics that we have discussed or not discussed today, and we'll take as much time as possible to answer those questions. Last comment is the buyback just reiterates the confidence that the management team and the Board have in our business, right? And it's not come 4 years back. It's not going to come 3 years later. It's come now. I think it's the right time for capital allocation and see whether we can improve the shareholder value here for Orica. So I hope that, that will be well received and well accepted. And obviously, we are happy now to take any questions you may have. Thank you very much.

Are there any further questions? We've got the microphones at the back. Other questions, join us. Okay. Thank you all for joining us. Thank you for taking the time out of your day. I mean I'm assuming your days are as manic as I was looking at what's happening to the market at the moment. But happy to take any further questions over the next couple of weeks. We'll go into blackout at the end of March. But looking forward to presenting our results on the 8th of May. Thank you, and have a good week.