Slide 1: August 2024
AUGUST 2024 © 2024 FORTESCUE FORTESCUE | 1
Slide 2: Important Notice – Forward Looking Statements
Important Notice The purpose of this presentation is to provide general information about Fortescue Ltd and its subsidiaries (“Fortescue”). It is not recommended that any person makes any investment decision in relation to Fortescue based on this presentation. This presentation contains certain stat
Slide 3: Technology, energy and metals group accelerating decarbonisation of industry
We are the technology, energy and metals group accelerating the commercial decarbonisation of industry, rapidly, profitably and globally. FORTESCUE | 3
Slide 4: FY24 highlights
METALS TRIFR of US$5.7bn 1.3 191.6Mt Commitment to prioritising safety in everything that we do Iron ore shipped Net profit after tax US$18.24/wmt US$0.5bn 70% net debt payout ratio Industry leading hematite Robust balance sheet to C1 cost support growth In line with dividend policy FORTESCUE | 4
Slide 5: 1.3 TRIFR
1.3 TRIFR Metals Total Recordable Injury Frequency Rate in FY24 Total Recordable Injury Frequency Rate (Metals) 5.1 4.3 3.7 2.9 2.8 2.4 2.0 1.8 1.8 1.3 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FORTESCUE | 5
Slide 6: 191.6Mt shipments, US$18.24/wmt C1 cost
191.6Mt US$18.24/wmt Industry leading hematite Total shipments C1 cost US$103/dmt 86% Hematite average revenue Hematite average revenue realisation FORTESCUE | 6
Slide 7: Revenue, Underlying EBITDA and NPAT
US$18.2bn US$10.7bn US$5.7bn Revenue Underlying EBITDA Net profit after tax 59% US$65/dmt1 US$1.85 Underlying EBITDA margin Underlying EBITDA per tonne Earnings per share (A$2.82) 1Fortescue Metals Underlying EBITDA. FORTESCUE | 7
Slide 8: Operating cash flow, free cash flow, debt and cash
US$7.9bn US$5.1bn Net operating cash flow Free cash flow US$5.4bn US$4.9bn Gross debt Cash on hand FORTESCUE | 8
Slide 9: FY24 total dividends
A$0.89 per share A$1.97 per share A$6.1bn FY24 total dividends Fully franked final dividend 70% payout ratio Value of FY24 dividends FORTESCUE | 9
Slide 10: FY25 guidance
190 - 200Mt 5 - 9Mt US$700m Iron Bridge concentrate Energy net operating Total iron ore shipments shipments (100% basis) expenditure US$18.50 - US$3.2 - US$500m US$19.75/wmt US$3.8bn C1 cost for hematite Metals capital expenditure Energy capital expenditure Guidance is based on an assumed FY25 excha
Slide 11: Metals
METALS FORTESCUE | 11
Slide 12: Integrated mine to market infrastructure
Integrated mine to market infrastructure Solar and wind locations are subject to further studies FORTESCUE | 12 and regulatory approvals.
Slide 13: Iron Bridge
Iron Bridge HIGH GRADE PRODUCT Supports lowering steelmaking emissions PORTFOLIO ENHANCEMENT Product and market diversification SAFE AND EFFICIENT Commissioning underway FORTESCUE | 13
Slide 14: Green Metal
Green Metal GREEN METAL PROJECT Works commenced in August 2024 PIT TO PRODUCT Fortescue ore + renewable energy + green hydrogen UP TO US$50m Capital investment approved FORTESCUE | 14
Slide 15: Belinga Iron Ore Project, Gabon
Belinga Iron Ore Project, Gabon EXPLORATION Exploration drilling campaign underway STUDIES ADVANCING For a potential large scale development PILOT SHIPMENT Achieved in December 2023 FORTESCUE | 15
Slide 16: Critical minerals and iron ore exploration
Critical minerals and iron ore exploration PILBARA Mindy South, Wyloo North and White Knight AUSTRALIA WA, NSW, SA and QLD INTERNATIONAL Gabon, Argentina, Chile, Brazil, Peru FORTESCUE | 16
Slide 17: Sustainability
FORTESCUE | 17
Slide 18: People – Diversity, Equity and Inclusion
People – Diversity, Equity and Inclusion GENDER DIVERSITY Aiming for 40:40:201 across Fortescue 37% FEMALE EMPLOYMENT In senior leadership roles 15% FIRST NATIONS Australians across our Pilbara workforce 1Minimum 40% men and 40% women, with the remaining FORTESCUE | 18 20% represented by any gender.
Slide 19: People – Culture and First Nations People
People – Culture and First Nations People A$5.3bn Contracts awarded to First Nations businesses since 20111 >1,500 First Nations people employed through Fortescue’s Vocational Training Employment Centre since 2006 NATIVE TITLE PARTNERS Seven Native Title Agreements CO-MANAGEMENT Collaborative approa
Slide 20: People – Community
People – Community A$27.5bn A$6.1bn A$86m Total economic Corporate taxes and Social investment in FY24 contribution in FY24 State royalties FORTESCUE | 20
Slide 21: Planet – Biodiversity
Planet – Biodiversity ZERO Significant environment incidents in FY24 METALS BIODIVERSITY STRATEGY Aiming to be a leader in biodiversity management BIODIVERSITY SURVEYS Broadening our knowledge of the environment in which we work FORTESCUE | 21
Slide 22: Planet – Climate and Decarbonisation
Planet – Climate and Decarbonisation REAL ZERO BY 20301 No voluntary carbon offsets NET ZERO SCOPE 3 BY 2040 Eliminating emissions across the value chain DECARBONISATION PLAN Costed plan to eliminate fossil fuels 1Scope 1 and 2 terrestrial emissions target across Fortescue’s Australian iron ore oper
Slide 23: Planet – Decarbonisation progress
Planet – Decarbonisation progress GREEN MINING EQUIPMENT Deployed at Pilbara operations NEW 100MW SOLAR FARM >1GW of solar infrastructure before the end of the decade GREEN PIONEER Conducted world’s first use of ammonia as a marine fuel FORTESCUE | 23
Slide 24: Energy
FORTESCUE | 24
Slide 25: Energy
Energy GREEN ENERGY Green hydrogen and its derivatives FORTESCUE ZERO Green technology and engineering services FORTESCUE CAPITAL Green energy investment accelerator platform FORTESCUE | 25
Slide 26: Fortescue Zero
Fortescue Zero POWER SYSTEMS High performance batteries and product portfolio FAST CHARGERS And DCDC Convertors for use outside of heavy industry and mining BATTERY INTELLIGENCE Multi-year deal with Jaguar Land Rover FORTESCUE | 26
Slide 27: Fortescue Zero
Fortescue Zero ELECTROLYSER PEM and Alkaline systems CUTTING EDGE Technology and membrane developments 2GW GEM CENTRE Australia’s first fully automated electrolyser manufacturing facility FORTESCUE | 27
Slide 28: Arizona Hydrogen, USA
Arizona Hydrogen, USA LIQUID GREEN HYDROGEN First production in 2026 PHASE 1 80MW electrolyser and liquefaction facility CONSTRUCTION Second half of 2024 FORTESCUE | 28
Slide 29: Gladstone PEM50 Queensland, Australia
Gladstone PEM50 Queensland, Australia TWO-STAGE 50MW Green hydrogen project US$150m PROJECT Construction underway FIRST PRODUCTION Expected in 2025 Artist impression only FORTESCUE | 29
Slide 30: Energy project pipeline
Energy project pipeline HOLMANESET, NORWAY 300MW green ammonia facility in feasibility phase PECÉM, BRAZIL GH2 project, commenced Front End Engineering Design process PIPELINE OF PROJECTS Oman, Morocco, Jordan and Egypt to follow next FORTESCUE | 30 Projects subject to Final Investment Decision; art
Slide 31: Financials
FORTESCUE | 31
Slide 32: Earnings
Earnings Full year earnings profile Revenue (US$m) Underlying EBITDA (US$m) Underlying NPAT (US$m) 10,295 22,284 16,375 18,220 17,390 16,871 10,561 10,708 6,197 9,963 12,820 5,522 * 5,664 8,375 4,735 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 *FY23 Statutory NPAT of U
Slide 33: Earnings reconciliation
Earnings reconciliation Revenue growth and disciplined cost control Underlying NPAT Analysis FY23 – FY24 (US$m) Underlying EBITDA Pilbara Operations 1,259 revenue and expenses Other operating and FX Research and Investments revenue net of royalty Net finance expenses Income tax1 administration Depre
Slide 34: Price realisations
Price realisations FY24 hematite average revenue of US$103/dmt Hematite average price realisation of the Platts 62% CFR Index Platts 62% CFR Index (US$/dmt) 160 91% 88% 87% 87% 87% 140 85% 85% 82% 120 100 80 60 40 20 0 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Jun-22 Sep-22 Dec-22 Mar-
Slide 35: Prices and margins
Prices and margins Strong margins through the cycle Prices and Metals Underlying EBITDA margin (US$/dmt) 160 140 120 100 99 80 60 65 63 60 52 40 20 - FY20 FY21 FY22 FY23 FY24 Underlying EBITDA Platts 62% CFR Index Realised price 5-year Average Underlying EBITDA 5-year Average Realised Price FORTESCU
Slide 36: Cash generation
Cash generation Generating strong operating and free cash flow Net cash flow from operations (US$m) Capital expenditure (US$m)1 Free cash flow (US$m)2 12,594 3,383 8,967 3,170 2,864 2,871 7,919 7,432 6,415 6,646 1,954 5,108 4,447 4,317 3,576 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 FY20 FY2
Slide 37: Capital expenditure
Capital expenditure Disciplined capital investments FY24 Capital expenditure and investments (US$m) FY25 Capital expenditure and investments guidance (US$m) 317 500 155 150 224 US$3.7 - US$2.9bn 700 – 2,000 – 900 US$4.3bn 2,300 2711 1,928 300 – 400 Sustaining and Hub Development Decarbonisation Expl
Slide 38: Strong balance sheet
Strong balance sheet With a balanced debt maturity profile Gross debt (US$m) Debt maturity profile excluding leases (US$m) Senior Unsecured Notes Green Senior Unsecured Note RCF (undrawn) Syndicated Term Loan 6,103 1,500 5,321 5,400 5,113 4,252 1,025 968 800 700 600 FY20 FY21 FY22 FY23 FY24 FY24 FY2
Slide 39: Credit metrics
Credit metrics Robust balance sheet Gross debt to EBITDA (x) Gross gearing (%) 28 0.6 0.6 26 23 0.5 0.5 22 19 0.3 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 FORTESCUE | 39
Slide 40: Return on capital
Return on capital Profitable and capital efficient Return on equity (%) Return on capital employed 1 (%) 66 66 40 37 36 35 30 31 27 27 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 1ROCE is calculated as earnings before interest and tax divided by average capital (total assets minus current liab
Slide 41: Delivering returns to our shareholders
Delivering returns to our shareholders Dividend policy to pay out 50-80% of Underlying NPAT Dividends (A$/share) and payout ratio (%) 5.00 0.90 78% 77% 80% 4.50 0.80 75% 70% 4.00 65% 62% 0.70 3.58 3.50 52% 0.60 3.00 0.50 2.50 38% 36% 2.07 0.40 1.97 2.00 1.76 1.75 0.30 1.50 0.89 1.14 0.20 1.00 0.45 0
Slide 42: Disciplined capital allocation
Disciplined capital allocation Delivering Maintaining Investing in returns to balance sheet growth and shareholders strength development 50-80% payout BB+/Ba1 Value creation of Underlying NPAT, Committed to targeting Across Energy dividend policy strong credit ratings and Metals FORTESCUE | 42
Slide 43: We are Fortescue
Family We are Empowerment Fortescue Frugality Stretch Targets Integrity Enthusiasm Safety Courage and Determination Generating Ideas Humility FORTESCUE | 43