Dyno Nobel (DNL) Investor Update summary

Strategic update and business separation

• Negotiations for the sale of the fertilizer business to PT Pupuk Kalimantan Timur have ended due to concerns over value and transaction certainty, with no active negotiations ongoing but openness to future opportunities.

• The strategic direction to eventually divest the fertilizer business remains unchanged, though execution will be reconsidered.

• An on-market share buyback program of up to AUD 900 million has been initiated, prioritizing shareholder returns and capital management.

• Structural separation of Dyno Nobel and IPF will continue, with each managed independently and dedicated management teams, and future options for separation will be assessed.

• Management is focused on delivering a three-stage strategy: separation, transformation of explosives, and potential industry consolidation.

Operational and financial outlook

• Fiscal year 2024 earnings outlook for Dyno Nobel and IPF remains in line with previous half-year statements.

• Fertilizer distribution business is improving margins and market share, with IPF Distribution performing well and Phosphate Hill production volumes expected at the lower end of guidance.

• Phosphate Hill plant remains profitable at current DAP and gas prices, with cost improvements maintained year-on-year.

• Sulfuric acid supply for Phosphate Hill is secured through 2030, unaffected by Glencore's closures.

• Dyno Nobel's performance is consistent with prior updates, and transformation plans are progressing toward global operations and financial improvement.

Capital management and balance sheet

• The AUD 900 million buyback is unrelated to the fertilizer sale and is funded by proceeds from the Waggaman transaction.

• Balance sheet will be managed to maintain investment grade and net debt/EBITDA at 1.5x, supporting both buyback and organic growth.

• No demerger is planned; structural separation refers to internal management, not a formal split.

• Organic growth initiatives for Dyno Nobel will continue, with inorganic opportunities considered after the buyback and transformation project.