Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — Shareholder Meeting (October 2016)
36 slides from Whitehaven Coal's shareholder meeting presentation, Oct 27, 2016
Slide 1: Annual General Meeting 2016
Whitehaven Coal Limited ANNUAL GENERAL MEETING 2016 Australia’s Leading High-Quality Coal Company 27 OCTOBER 2016
Slide 2: Disclosure
Disclosure STATEMENTS CONTAINED IN THIS MATERIAL, PARTICULARLY THOSE REGARDING THE POSSIBLE OR ASSUMED FUTURE PERFORMANCE, COSTS, DIVIDENDS, RETURNS, PRODUCTION LEVELS OR RATES, PRICES, RESERVES, POTENTIAL GROWTH OF WHITEHAVEN COAL LIMITED, INDUSTRY GROWTH OR OTHER TREND PROJECTIONS AND ANY ESTIMATE
Slide 3: Agenda
Agenda – Key Highlights – Safety – Financial Performance – Operations – Community – Outlook for Coal Use – High Coal Quality – Outlook – Appendices 3 // 2016 AGM PRESENTATION
Slide 4: Key Highlights
Key Highlights RECORD PRODUCTION AND RETURN TO PROFIT PROFIT $20.5m COAL SALES AT CYCLE LOWS 15.4Mt UP 42% ON PEOPLE PREVIOUS YEAR 843(FTE) SAFETY PERFORMANCE 80% LIVING IN AREA OF OPERATIONS 10.6 TRIFR 47% IMPROVEMENT BALANCE SHEET at 30 June, 2016 SINCE 2013 $859m Debt DOWN BY $77M 4 // 2016 AGM P
Slide 5: Safety
Safety EN WHITEHAVEN COAL
Slide 6: Safety Performance
Safety Performance Whitehaven and NSW Coal Industry TRIFR – Whitehaven’s TRIFR remains significantly 25.00 below NSW coal mining average – TRIFR 10.6 at end of FY2016, reduced 20.00 further to 9.9 at 30 September – Training to underpin Whitehaven’s 15.00 “Safehaven Rules” will be reemphasised given
Slide 7: Financial Performance
Financial Performance EN WHITEHAVEN COAL
Slide 8: Financial Highlights
Financial Highlights STRONG RESULTS AT THE BOTTOM OF THE COAL PRICE CYCLE Profit and loss FY2016 FY2015 Comment – First full year profit since Net profit after tax ($’m) 20.5 (342.7) FY2012 EBITDA ($’m) 224.1 130.3 – Up 72% on previous year Cash generated from operations ($’m) 269.3 152.7 – Up 76% o
Slide 9: Cash Costs
Cash Costs WHITEHAVEN HAS SUCCESSFULLY REDUCED COSTS IN EACH OF THE PAST FOUR YEARS Whitehaven Cash Costs ($/t ex Royalties) – Cash costs have fallen consistently 80 – Costs are in the first quartile of costs for thermal coal mines 75 – Costs are expected to be flat for FY17 as 70 more higher margin
Slide 10: Cash Margins
Cash Margins WHITEHAVEN’S CASH MARGIN HAS BEEN GROWING FOR A NUMBER OF YEARS Whitehaven's EBITDA Margin Over Time ($/t) – Whitehaven has consistently grown its 60 EBITDA margin from $3.50/t in FY13 to $14.00/t in FY16 50 – The ongoing focus on costs has enabled 40 the margin to grow despite the weak
Slide 11: Balance Sheet
Balance Sheet STRENGTHENING THE BALANCE SHEET WITH DEBT REDUCED 30 June 2016 30 June 2015 – Net debt was reduced by $77m during FY2016 $’m $’m – Subsequent to year end a further $35m has Cash on hand 101.5 102.4 been paid down Senior secured bank facility 835.0 900.0 – Further debt reduction remains
Slide 12: Operations
Operations EN WHITEHAVEN COAL
Slide 13: Coal Sales and Production
Coal Sales and Production RECORD YEAR FOR BOTH MANAGED SALES AND SALEABLE COAL PRODUCTION Whitehaven Managed Sales and Production – Managed sales and saleable (000's t) production have increased by a factor 25,000 of 4 times over five years and reached 20Mt in FY2016 20,000 – Equity sales and saleab
Slide 14: Sales Destinations
Sales Destinations COAL SALES FOCUSED ON PREMIUM ASIAN MARKETS Thermal Coal Sales FY2016 Annual Coal Sales by Type 100% 7% 20% 16% 16% 2% 4% 80% Japan Korea 60% 53% 61% 68% 13% Taiwan 40% 60% Americas 20% 27% 22% 16% 14% Malaysia 0% FY2014 FY2015 FY2016 Other Asia LCV Coal Benchmark Thermal Metallur
Slide 15: Maules Creek - NSW Mine of the Year
Maules Creek - NSW Mine of the Year PRODUCTION RAMPING ON SCHEDULE Maules Creek ROM Coal Production (000's t) – Maules Creek awarded the prestigious 12,000 Mining Operation of the Year by The NSW Minerals Council in May, less than one 10,000 year after startup of commercial operation – The Reserve i
Slide 16: Another Record Year for Narrabri
Another Record Year for Narrabri FACE WIDENING PROJECT ON SCHEDULE Narrabri Saleable Coal Production (000's t) – Narrabri produced 6.9Mt ROM coal and 7.3Mt saleable coal in a year where two 10,000 longwall moves occurred – The face widening project is running to 8,000 schedule and budget with produc
Slide 17: Stable Production from Open Cuts
Stable Production from Open Cuts STABLE PRODUCTION FROM THE GUNNEDAH OPENS CUTS Gunnedah Open Cut Saleable Coal Production – Production from the Gunnedah open (100%, 000’s t) cuts is expected to be maintained 6,000 around current levels for the next two years 5,000 – Reserves at Rocglen are due to b
Slide 18: Vickery – The Next Project
Vickery – The Next Project SIGNIFICANT PROGRESS WITH APPROVAL PROCESS FOR 10MTPA PROJECT Project is currently approved as a 4.5Mtpa open cut by the NSW Government. Whitehaven is seeking approval to increase production to 10Mtpa ROM coal Location About 25kms north of Gunnedah Resources and Reserves R
Slide 19: Community
Community EN WHITEHAVEN COAL
Slide 20: Workforce Diversity
Workforce Diversity WHITEHAVEN IS COMMITTED TO PROVIDING LASTING OPPORTUNITY TO ALL MEMBERS OF THE LOCAL COMMUNITY – Female representation in business increased from 8.7% to 10.5% – Females occupy 15% operational roles at Maules Creek – Aboriginal representation across the company increased from 8%
Slide 21: Working with the Community
Working with the Community NEW OFFICE IN GUNNEDAH REFLECTS COMMITMENT TO THE REGION – New dedicated office in Gunnedah CBD enhances link with local community – Supported more than 600 businesses and suppliers from local government shires in FY16 – $6m in Voluntary Planning Agreement payments made to
Slide 22: Environment – Biodiversity in Action
Environment – Biodiversity in Action WHITEHAVEN HAS OVER 20,000 HECTARES SET ASIDE FOR BIODIVERSITY – Significant work has been undertaken on the land in FY2016 and YTD FY2017 – 800 hectares of revegetation undertaken – Further 542 hectares has been prepared for revegetation – 9 kilometres of new fe
Slide 23: Family Open Day
Family Open Day MAULES CREEK HOSTED A SITE VISIT FOR EMPLOYEE FAMILY MEMBERS WITH 380 ATTENDING 23 // 2016 AGM PRESENTATION
Slide 24: Outlook for Coal Use
Outlook for Coal Use EN WHITEHAVEN COAL
Slide 25: Coal’s Key Role In Global Energy Mix
Coal’s Key Role In Global Energy Mix DEMAND FOR COAL IN MANY ASIAN COUNTRIES CONTINUES TO GROW – Coal represents the largest share of the energy mix in most Asian countries – For power and industry in Asia, coal’s comparative advantage remains formidable – Coal is simple to produce, ready to use, sa
Slide 26: Impact of Higher CV Coals
Impact of Higher CV Coals USE OF MAULES CREEK COAL IN POWER GENERATION REDUCES CARBON EMISSIONS Carbon Emission Improvement by Coal Type – Using higher quality coals in USC power stations will lower carbon 0.0% Lignite emissions (2%) Improvement in CO2 intensity (%) – Less higher energy coal is (4%)
Slide 27: Coal - Pathway to Lower Carbon Emissions
Coal - Pathway to Lower Carbon Emissions UTILISING HIGH QUALITY COALS IN MORE EFFICIENT HELE POWER STATIONS LOWERS EMISSIONS – If the world converted from lignite Old and New Generating Technology (kg and black coal fired subcritical CO2/kWh) power stations to black coal fired 1600 USC plants then C
Slide 28: Asia Adding Generation Capacity
Asia Adding Generation Capacity INSTALLATION OF NEW HELE CAPACITY IN ASIA IS INCREASING DEMAND FOR HIGHER QUALITY COAL Asian Coal Fired Capacity Growth (MW) – Significant new electricity generating capacity 15,000 is being added to Whitehaven’s key markets in north Asia and southeast Asia over the n
Slide 29: Outlook
Outlook EN WHITEHAVEN COAL
Slide 30: Market Outlook
Market Outlook SEABORNE MARKET ACHIEVED BALANCE IN H2 FY2016? GlobalCoal Thermal Coal Price FY2016 & – Production cuts from Indonesia, United YTD FY2017 (US$/t) States and Australia and other countries 100.0 have rebalanced the market 90.0 – Recent policy changes in China (276 working day limit) has
Slide 31: Whitehaven’s Production Growth
Whitehaven’s Production Growth MAULES CREEK RAMP UP AND WIDER FACE AT NARRABRI CONTRIBUTING TO GROWTH Saleable Coal Production (100%, Mt) – Ramping up of production from 25.00 Maules Creek continues and the wider face at Narrabri contributes 20.00 from H2 FY2017 – Increased production higher quality
Slide 32: Focus for FY2017
Focus for FY2017 GROW PRODUCTION SAFELY AND DEBT REDUCTION OPERATIONS − Improve safety performance − Increase saleable coal production for FY2017 to the range of 21Mt to 22Mt (100% basis) − Deliver the face widening project at Narrabri and commence mining in the initial 400m wide panel − Ensure that
Slide 33: www.whitehavencoal.com.au
www.whitehavencoal.com.au -N WHITEHAVEN COAL ATO
Slide 34: Appendices
Appendices EN WHITEHAVEN COAL
Slide 35: Resources
Resources Note: See Competent Person Statement on Slide 2 35 // 2016 AGM PRESENTATION
Slide 36: Reserves
Reserves Note: See Competent Person Statement on Slide 2 36 // 2016 AGM PRESENTATION