Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — Shareholder Meeting (October 2017)
44 slides from Whitehaven Coal's shareholder meeting presentation, Oct 25, 2017
Slide 1: ASX cover letter for AGM addresses
25 October 2017 For personal use only The Manager, Listings Australian Securities Exchange Company Announcements Office Via ASX Online Dear Sir, Annual General Meeting – Chairman’s Address and Managing Director’s Presentation We attach copies of the Chairman’s Address and Managing Director’s Present
Slide 2: Chairman's Address
WHITEHAVEN COAL AGM 2017 For personal use only 25 October 2017 Chairman’s Address It gives me great pleasure to provide my Chairman’s Report on Whitehaven Coal’s performance for the 2017 financial year. This year marks ten years since your Company listed on the Australian Securities Exchange. I am p
Slide 3: Chairman's Address (continued)
around 500 jobs during the construction phase and roughly 450 jobs during operations, the majority of which will come from the local communities of Gunnedah, Narrabri, Boggabri and surrounding areas. The Project will deliver substantial economic benefits to the local area and NSW more broadly, inclu
Slide 4: Annual General Meeting 2017
For personal use only Whitehaven Coal Limited ANNUAL GENERAL MEETING 2017 Australia’s Leading High-Quality Coal Company THE MINT, 10 MACQUARIE STREET, SYDNEY NSW 2000 25 OCTOBER 2017
Slide 5: Disclosure
Disclosure STATEMENTS CONTAINED IN THIS MATERIAL, PARTICULARLY THOSE REGARDING THE POSSIBLE OR ASSUMED FUTURE PERFORMANCE, COSTS, DIVIDENDS, For personal use only RETURNS, PRODUCTION LEVELS OR RATES, PRICES, RESERVES, POTENTIAL GROWTH OF WHITEHAVEN COAL LIMITED, INDUSTRY GROWTH OR OTHER TREND PROJEC
Slide 6: Agenda
Agenda For personal use only – Highlights – History – Safety – Financial Performance – Operations – Community & Environment – Outlook for Coal Use – Outlook – Appendices 3 // 2017 AGM PRESENTATION
Slide 7: Record Year Highlights
Record Year Highlights WHITEHAVEN REPORTS RECORD PROFIT IN ITS 10TH ANNIVERSARY OF ASX LISTING For personal use only Safety improved with the Record full year net profit Profitable TRIFR declining half year at cycletolows 7.4 at Y/E including significant items of $405.4 million up 1,879% Equity coal
Slide 8: History – 1999 to 2017
History – 1999 to 2017 ESTABLISHED IN 1999 AND LISTED ON ASX IN 2007 For personal use only 5 // 2017 AGM PRESENTATION
Slide 9: Strong Production Growth
Strong Production Growth COAL PRODUCTION HAS INCREASED IN EVERY YEAR SINCE LISTING ON THE ASX For personal use only Whitehaven's Managed Production Growth - 10 Years (Mt) 25.0 20.0 15.0 10.0 5.0 0.0 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 – With the development o
Slide 10: Record Profit in 2017
Record Profit in 2017 ADDING LOW COST MINES TO THE PORTFOLIO HAS LIFTED FINANCIAL RETURNS For personal use only Whitehaven's Earnings History - 10 Years ($m's) 800.0 700.0 600.0 500.0 400.0 300.0 200.0 100.0 0.0 -100.0 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 EBIT
Slide 11: For personal use only
Y“) peb) =r oD = < For personal use only EN WHITEHAVEN COAL
Slide 12: Safety Performance
Safety Performance For personal use only Whitehaven Coal Group - TRIFR – Whitehaven’s TRIFR remains (12 Month Rolling Average Recordable Injuries significantly below NSW coal mining per Million Hours Worked) average 25.0 – TRIFR 6.75 at the end of September is 20.0 the lowest recorded by Whitehaven
Slide 13: Financial Performance
For personal use only Financial Performance
Slide 14: Financial Highlights
Financial Highlights HIGHER COAL PRICES FLOWING DIRECTLY TO PROFITS, DISTRIBUTION AND CASH FLOW For personal use only Profit and loss FY2017 FY2016 Comment Revenue 1,773.2 1,164.4 – Up by 52% Net profit after tax ($’m) 405.4 20.5 – Up 1,878%, record result including significant items EBITDA before s
Slide 15: Costs and Margins
Costs and Margins INCREASED REVENUE AND TIGHT COST CONTROL For personal use only Whitehaven's ASP and Costs ($/t) – The strong increase in revenue and 120 modest increase in costs reflected in the improved margin 100 – Average received metallurgical and thermal coal prices for the year were US$102/t
Slide 16: Strong Balance Sheet
Strong Balance Sheet WHITEHAVEN IS WELL POSITIONED FOR THE FUTURE For personal use only 30 June 2017 30 June 2016 – Net debt reduced by $528m over FY2017with $’m $’m a further $275m paid down since year end Cash on hand 87.1 101.5 – Our senior secured bank facility drawn to only $50m today Senior se
Slide 17: Operations
For personal use only Operations
Slide 18: Whitehaven is a Significant Player in the Asian Coal Market
Whitehaven is a Significant Player in the Asian Coal Market AS ASIA GROWS WHITEHAVEN GROWS For personal use only Number of Whitehaven Customers – In FY2017 96% of Whitehaven’s coal was sold into the Asian (excludes Traders) Japan region – Whitehaven has been involved in the seaborne market since Kor
Slide 19: Maules Creek Growth & Product Mix
Maules Creek Growth & Product Mix PRODUCTION OF HIGHER MARGIN METALLURGICAL COAL INCREASING For personal use only Maules Creek Saleable Production Mix (Mt) – Sales of metallurgical coal reached 2.3Mt for 12.0 the year and is expected to increase to 9.8 approximately 3.5Mt (35%) in FY2018 10.0 9.0 –
Slide 20: Narrabri's Future
Narrabri’s Future For personal use only SIGNIFICANT ADDITIONAL MINE LIFE AT NARRABRI – Mine life at Narrabri can be increased by many years by: Incorporating the Narrabri South exploration licence (EL) into the current mine plan, and The successful application for an EL for coal under the Operat
Slide 21: Gunnedah Open Cuts
Gunnedah Open Cuts STRONG PRODUCTION PERFORMANCE FROM ALL MINES For personal use only Saleable Coal Production (Mt) – The three open cuts produced a record 6.0 6.1Mt of ROM coal and finished the year 5.1 5.1 5.0 with good stock levels. This coal will be 4.8 4.3 sold during the first half of FY2018 4
Slide 22: Vickery – The Next Project
Vickery – The Next Project 10MTPA PROJECT SUPERIOR OUTCOME FOR COMMUNITY, EMPLOYEES AND SHAREHOLDERS For personal use only 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
Slide 23: Community & Environment
For personal use only Community & Environment
Slide 24: Community Views of Whitehaven
Community Views of Whitehaven COMMUNITY SURVEYS POINT TO SIGNIFICANT IMPROVEMENT OVER TWO YEARS For personal use only 2015 Community Survey Results 2017 Community Survey Results Positive & Neutral 28% Positive & Neutral Negative 39% Negative 61% 72% – Lo cal residents from the G unnedah region with
Slide 25: Community Contribution
Community Contribution WHITEHAVEN IS COMMITTED TO PROVIDING LASTING OPPORTUNITY TO ALL MEMBERS For personal use only OF THE COMMUNITY IN WHICH WE OPERATE 22 // 2017 AGM PRESENTATION
Slide 26: Environmental Credentials
Environmental Credentials LOW WATER USE AND SIGNIFICANT CONTRIBUTION TO BIODIVERSITY OFFSETS For personal use only 23 // 2017 AGM PRESENTATION
Slide 27: Environment – Biodiversity in Action
Environment – Biodiversity in Action WHITEHAVEN PLANTED OVER 160,000 TREES IN BIODIVERSITY OFFSET AREAS For personal use only – Over 668 hectares rehabilitated, a further 937 hectares prepared for revegetation and 11,000 hectares sprayed for weed control – 16.8 kilometres of new fencing installed an
Slide 28: New RAP
New RAP WHITEHAVEN IS ABOUT TO LAUNCH ITS NEW “STRETCH” RECONCILIATION ACTION PLAN For personal use only Success from our Innovate RAP – Native Title Agreement signed – Aboriginal Employment Strategy developed and implemented – Executive team cultural awareness and immersion programme delivered by a
Slide 29: Outlook for Coal Use
For personal use only Outlook for Coal Use
Slide 30: World Electricity Generation Growth
World Electricity Generation Growth ELECTRICITY GENERATION IS FORECAST TO INCREASE BY 45% FROM 2015 TO 2040 For personal use only – Electricity generation from coal increases by over 10 %and coal remains the largest source of world electricity generation in 2040 (31%) while wind and solar grow from
Slide 31: Asian Thermal Coal Demand
Asian Thermal Coal Demand STRONG GROWTH IN WHITEHAVEN’S MARKETS For personal use only Asian Thermal Coal Demand (Mt) 7000 6000 – Asian thermal coal demand is forecast to grow from 5000 4000 4.5Bt in 2016 to 6.2Bt from 2015 to 2035 an increase of 3000 1.7Bt 2000 – The growth in Whitehaven’s key marke
Slide 32: Taipower - a Large Whitehaven Customer
Taipower - a Large Whitehaven Customer INSTALLED COAL-FIRED CAPACITY INCREASING BY 3.4GW AND COAL DEMAND BY 9MT For personal use only 2017 Term Tenders 2015 Term Tenders: 2016 Term Tenders: Bituminous coal quality: Bituminous coal quality: Bituminous Coal Quality: Introduced 14% Ash max, 16% Ash max
Slide 33: HELE Power Stations Lower Carbon Emissions
HELE Power Stations Lower Carbon Emissions DEPLOYMENT OF HELE POWER STATIONS IMPROVES EFFICIENCY AND LOWERS EMISSIONS For personal use only Emissions by Technology (kgCO2/MWh) 1600 – Power station efficiency improves 1400 from 32% (Victorian lignite) to 45% 1200 (typical Japan) in modern ultra (49%)
Slide 34: Coal Generation in Australia
Coal Generation in Australia SCHEDULED PLANT CLOSURES IN AUSTRALIA WILL LOWER SYSTEM RELIABILITY For personal use only – On average over the past year coal NEM Power Station Forecast Retirements generators have supplied about 66% Hazelwood Closure of Australia’s electricity needs Liddell Closure? de
Slide 35: Electricity Generation Costs
Electricity Generation Costs USC (HELE) POWER GENERATION IS THE LOWEST COST SOLUTION FOR AUSTRALIA For personal use only – HELE electricity is the lowest cost 24/7 power (A$/MWh) – New HELE plants can maintain grid security and reliability whilst providing the lowest cost option to replace ageing co
Slide 36: Outlook
For personal use only Outlook
Slide 37: Thermal Coal Market - Balanced
Thermal Coal Market - Balanced SEABORNE MARKET BALANCED WITH DISRUPTIONS LIKELY TO PROVIDE PRICE UPSIDE For personal use only – Ongoing production issues in Australia GlobalCoal Thermal Coal Price 2016 & 2017 (US$/t) (strikes) and Indonesia (weather) have 120.0 limited production growth – Production
Slide 38: Whitehaven's Production Profile
Whitehaven’s Production Profile MAULES CREEK RAMP UP AND VICKERY CONTRIBUTE TO GROWTH IN THE FUTURE For personal use only Actual and Forecast Saleable Coal Production – Ramping up of production from Maules (100%, Mt) Creek continues with the next step up 30 due in early FY2019 25 – Saleable coal pro
Slide 39: Embedded Growth Opportunities
Embedded Growth Opportunities ORGANIC OPTIONS TO GROW SHAREHOLDER VALUE For personal use only – Increase the approval limit at Maules Creek from 13Mtpa ROM to 15+Mtpa ROM – Extend the longwall panels into the south area at Narrabri, increasing LOM and annual production – Seek additional lease opport
Slide 40: Targets for FY2018
Targets for FY2018 For personal use only GROWING PRODUCTION SAFELY AND INCREASING SHAREHOLDER RETURNS Operations − Continue improving safety performance − Deliver saleable coal production guidance in the range of 22Mt to 23Mt (100% basis) − Limit cost increase in FY2018 to the range of $1/t to $2/t
Slide 41: www.whitehavencoal.com.au
www.whitehavencoal.com.au -N WHITEHAVEN COAL ATO
Slide 42: Appendices
For personal use only Appendices
Slide 43: Resources
Resources For personal use only Note: See Competent Person Statement on Slide 2 40 // 2017 AGM PRESENTATION
Slide 44: Reserves
Reserves For personal use only Note: See Competent Person Statement on Slide 2 41 // 2017 AGM PRESENTATION