Penrice SodaPenrice SodaGuy Roberts Managing Director & CEOManaging Director & CEO

Goldman Sachs JB WereMicro Cap Conference 27-28 May 201027-28 May 2010

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Outline

• Overview• Business Drivers• Financial Performance• Financial Performance• Outlook

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Overview

• Australia’s only manufacturer of soda ash since 1935Australia s only manufacturer of soda ash since 1935

• Australia’s only manufacturer of sodium bicarbonate since 1995

• One of the world’s largest sodium bicarbonate marketing companies

• Significant supplier of limestone and aggregates in South Australiag pp gg g

• Two divisions –

• Chemicals - manufacturing soda ash & sodium bicarbonate

• Quarry & Mineral - mining limestone, aggregates and landfill

3…Australia’s only soda ash and bicarbonate producer

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Overview - Corporate Snapshot

PENRICE SODA HOLDINGS LIMITED

ASX code PSH

Revenue Breakdown

20%ASX code PSH

Shares on Issue (May 2010) 91.4m

Market Capitalisation* ~A$39m

80%

Chemicals Quarry & Mineral

Net Debt (at 31 Dec 2009) A$63.2m

Gearing (ND/ND+E) (at 31 Dec 2009) 41%

*As at 24 May 2010

EBITDA BreakdownShare Price Performance

1.00

0 50

0.75

1.00

hare

40%

60%

0.25

0.50

A$/

sh

Chemicals Quarry & Mineral

0.00Jul-09 Oct-09 Jan-10 Apr-10

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Overview - Strategy

ChemicalsS d A h• Soda Ash• defend strong domestic Australian market franchise • grow sales with recovery in glass and mining

• Sodium Bicarbonate• defend domestic Australian market franchise • grow sales further in fast growing premium export• grow sales further in fast-growing premium export

markets• evaluate further expansion to meet demand

Quarry & Mineral• secure key raw material for chemicals business

• grow sales in civil, construction & landfill markets

5…disciplined return focus to drive shareholder value

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Overview - Key Assets

• Chemicals• Osborne, South Australia

• Chemical plant– Soda ash, sodium bicarbonate,

• Quarry & Mineral• Angaston, South Australia

• Limestone mine & quarry– limestone , aggregate, landfill

• Salt• Salt• Salt Fields, South Australia

• Long-term strategic supply agreement with Ridley untilagreement with Ridley until 2026

66…competitive raw materials & world scale assets

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Overview - Processes & Markets

Angaston

Quarry

LimestoneLime Products• Glass• Industrial

Markets

Osborne

Chemical PlantMarkets

• Cement & Lime• Agriculture • Landscaping

Salt /Ammonia

Aggregate• Building• Construction• Roads

Chemical Plant

Markets

Water / SteamPower / Coke

Landfill• Landfill• Construction• Roads

Soda Ash Bicarb • Glass (Flat & Bottle)• Detergents

• Food• Personal Care

Markets

Markets Markets

• Detergents• Building & Construction• Mining• Chemicals• Export

• Personal Care• Pharmaceutical

• Animal Nutrition• Export (28 countries)

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Business Drivers – Chemicals

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Business Drivers – Soda Ash

• Produces up to 300,000 tonnes annuallyProduces up to 300,000 tonnes annually

• Supplies approximately 80% of domestic demand, balance imported

Si ifi t i t f• Significant input for:

• glass packaging (beer, wine, food, non alcoholic beverages)

• flat glass (windows)flat glass (windows)

• manufacturing and mineral processing

• Top 3 customers (Owens-Illinois, Amcor and CSR Viridian) represent ∼ two op 3 custo e s (O e s o s, co a d CS d a ) ep ese t t o

thirds of volume

• Owens Illinois and Amcor recent contract extensions

9…low cost producer

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Business Drivers – Sodium Bicarbonate

• One of 5 largest plants in the world

• Used in food, pharmaceuticals, medical & personal care products,

kf dstockfeed

• Focus on higher priced premium grade used in food and pharmaceuticals

• E t 70% f l t 28 t i i l A i P ifi• Exports ∼ 70% of volume to 28 countries, mainly Asia Pacific

• Plant expanded from 75,000 to 100,000 tpa to meet export demand

• Full production by end Q4 FY2010• Full production by end Q4 FY2010

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…current returns well exceed hurdle rate

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Business Drivers – Quarry & Mineral

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Business Drivers – Limestone, Aggregates, LandfillAggregates, Landfill• Owns and operates largest limestone mine in South Australia

• Limestone supplied as raw material for Penrice Chemicals business & third party users

• Adelaide Brighton, Owens Illinois and Amcor recent contract extensions

• Overburden extraction for limestone mining results in inventory of• Overburden extraction for limestone mining results in inventory of aggregates and landfill

• Aggregates sold for civil & construction and landfill sold for land development

• Exclusive rail access to northern Adelaide for proposed landfill and road developments

• Detailed 20 year mine plan adopted in Q2 FY2010 provides limestoneDetailed 20 year mine plan adopted in Q2 FY2010 provides limestone security, reduced overburden extraction and inventory build – improved cash flows

• 10 20% ed ction in agg egates e t action and 70 80% ed ction in landfill• 10-20% reduction in aggregates extraction and 70-80% reduction in landfill extraction over the next 5 years of the mine plan

12…proven line life of 20+ years

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Financial Performance

• Increased plant efficiency leading to margin improvement

FY2010 impacted b GFC and high AUD$• FY2010 impacted by GFC and high AUD$

($ million unless otherwise stated) Income Statements( )Period FY 2007 FY 2008 FY 2009 H1 2010

Sales revenue 134.2 135.1 162.3 77.9EBITDA* 19.1 19.8 27.0 10.9Depreciation (5.4) (5.5) (7.4) (4.1)EBIT * 13 7 14 3 19 6 6 8EBIT * 13.7 14.3 19.6 6.8Net interest expense (4.3) (5.9) (8.6) (4.1)Profit before tax* 9.4 8.4 11.0 2.7Tax expense* (2.7) (1.8) (2.0) (0.3)Net profit after tax* 6.7 6.6 9.0 2.4After tax unrealised gain/(loss) on hedges - 0.7 (1.9) 0.7Reported net profit after tax 6.7 7.3 7.1 3.1

RatiosInterest cover (EBITDA*/net interest} times 4.4 3.4 3.1 2.7EBITDA margin (%) 14.2 14.7 16.6 14.0

Per share dataUnderlying EPS (cents)* 14.9 14.6 18.1 3.3Statutory EPS (cents) 14.9 16.1 14.3 4.5Dividend per share (cents) 10.0 10.5 Nil Nil

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*Excludes unrealised hedge losses/gainsNumbers subject to rounding

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Financial Performance

• Net $26m capital raising in October 2009 to reduce debt • Gearing reduced to 41% from 59%• Gearing reduced to 41% from 59%• Quarry & Mineral inventory to peak in FY2010, then reduce

Group Balance SheetGroup Balance Sheet($ million) Balance date 30 Jun 2007 30 Jun 2008 30 Jun 2009 31 Dec 2009

Cash 2.2 4.3 0.7 9.2Trade and other receivables 16.9 19.0 24.7 19.2Inventories 20.6 38.4 56.0 62.9Inventories 0 6 38 56 0 6 9Property, plant and equipment 62.7 77.1 92.8 94.0Intangibles 21.8 18.8 18.1 18.3Other assets 5.5 7.8 6.5 7.0Total assets 129.7 165.4 198.8 210.6

Trade and other payables 18.7 24.9 32.9 30.0p yBorrowings 48.4 75.6 87.3 72.4Other liabilities 16.9 16.7 17.1 17.1Total liabilities 84.0 117.2 137.3 119.5

Net assets 45.7 48.2 61.5 91.1

0 3 3 6 80 0Share capital 44.0 44.3 53.6 80.0Retained profits 1.7 3.9 7.9 11.1Total shareholders funds 45.7 48.2 61.5 91.1

Gearing [net debt/(net debt+equity)] 50% 59% 59% 41%Return on shareholders’ funds (%) 14.8% 15.5% 13.0% 8.3%

14Numbers subject to rounding

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Outlook – FY2010

• Underlying profit after tax $5-6m, cash flow of $7-9m negative expected for FY2010 impacted by:expected for FY2010, impacted by:• Sharp decline in soda ash demand (30,000 tonnes) in Q3 of which

20,000 tonnes sold to export markets at reduced margin

• R d d t kf d d d f di bi b t lti f• Reduced stockfeed demand for sodium bicarbonate resulting from flooding in eastern Australia in Q3

• Sustenance capital expenditure of $10m, in line with FY2010 plan

• Negotiations with banks underway to defer FY2011 debt amortisation following October 2009 capital raising

• Benefits of 3 year business improvement “Way Forward Plan” being• Benefits of 3 year business improvement Way Forward Plan being achieved

15…Q3 demand impacted by GFC, weather events

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Outlook - Going Forward

Chemicals• Soda AshSoda Ash

• Uplift in soda ash prices in FY2011 from key customer contracts agreed in FY2010

• Expected recovery of soda ash volume in glass and mineral processing

• Potential opportunities with coal seam gas producers to extract soda ash and sodium bicarbonate from coal seam gas waste water;ash and sodium bicarbonate from coal seam gas waste water; potential markets Australia and export

• Sodium Bicarbonatel f d b b f d d ( l d• Sales of sodium bicarbonate from expanded capacity (completed

FY2009) to strongly growing Asian economies for premium product

• Potential further $8m staged expansion of sodium bicarbonate plant $ g p pto 125,000 tpa into premium food and pharma markets in Asia Pacific

• Business case being finalised, commencement as global economic conditions and markets improve – earliest H2 FY2011

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…returns to benefit from pricing, growth opportunities

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Outlook - Going Forward

Quarry & Mineral• Conversion of aggregates, landfill inventory into sales in FY2011 and

beyond

• New mine plan to bring reduced overburden extraction in FY2011 andNew mine plan to bring reduced overburden extraction in FY2011 and beyond

• Limestone contract with largest external customer Adelaide Brighton Cement extended to end 2014Cement extended to end 2014

Corporate

• Capital/financial discipline – investment return hurdle of 15%*

*EBIT return on net operating assets

17…financial discipline

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The Penrice Advantage

• Australia’s only soda ash and sodium bicarbonate producer

• One of the world’s largest sodium bicarbonate marketing companies and a premium supplier

• Supplies the majority of the Australian soda ash market

• Large mine supplying civil material in a growth region

• Major South Australian employerMajor South Australian employer

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Contacts

Guy Roberts Managing Director & CEOGuy Roberts, Managing Director & CEOTelephone: +61 (8) 8402 7239

Frank Lupoi CFO & Company SecretaryFrank Lupoi, CFO & Company SecretaryTelephone: +61 (8) 8402 7280

PENRICE SODA HOLDINGS LIMITEDABN 83 109 193 419

Solvay Road OsborneSolvay Road, OsborneSouth Australia

AUSTRALIA 5017

Telephone: +61 (8) 8402 7000Facsimile: +61 (8) 8402 7250Facsimile: +61 (8) 8402 7250

Email: enquiries@penrice.com.au

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