Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Credit Suisse Energy Summit 2012
26 slides from Peabody Energy's conference presentation, Feb 7, 2012
Slide 1: Credit Suisse Energy Summit 2012
Credit Suisse Energy Summit 2012 Michael C. Crews Executive Vice President and Chief Financial Officer February 7-8, 2012 Peabody Energy Energizing The World One BTU At A Time
Slide 2: Statement on Forward-Looking Information
Statement on Forward-Looking Information Some of the following information contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, and is intended to come within the safe-harbor protection
Slide 3: Peabody Energy Well Positioned for Near and Long Term
Peabody Energy (NYSE: BTU) Well Positioned for Near and Long Term Record safety and financial results in 2011 Expected growth of 8 - 11 million tons of Australian met and thermal volumes in 2012 Reshaped portfolio targets highest growth regions Well positioned in U.S.; Fully contracted 2012 volumes
Slide 4: Peabody's Global Transformation Leads to Record Financial Results
Peabody's Global Transformation Leads to Record Financial Results Increasing Revenues, EBITDA and Operating Cash Flow +80% Revenues $ in Millions 2007 $4,422 2008 2009 2010 2011 $7,974 +122% EBITDA $ in Millions 2007 $958 2008 2009 2010 2011 $2,129 +258% Operating Cash Flow $ in Millions 2007 $463 2
Slide 5: Global Markets Continue to Grow
Global Markets Continue to Grow 5
Slide 6: Near-Term Global Coal Markets Marked by Opportunities and Challenges
Near-Term Global Coal Markets Marked by Opportunities and Challenges Opportunities World tops 1 billion tonnes of seaborne coal imports China and India continue to import at record levels Asia markets provide support for seaborne coal Global gas and oil prices remain strong Global steel demand proje
Slide 7: PRB and Illinois Basin Expected to Grow as Appalachia Declines
PRB and Illinois Basin Expected to Grow as Appalachia Declines PRB, Illinois Basin Expected to Grow By 15-20% Over Next 5 Years Additional near-term coal-to-gas switching projected CAPP most impacted; challenged by costs, permitting, geology U.S. basins expected to see significant demand shift Lower
Slide 8: Seaborne Markets Continue to Import Record Volumes: China
Seaborne Markets Continue to Import Record Volumes: China World's Largest Coal Consumer Increasing Demand and Imports China Net Coal Imports Tonnes in Millions 2009 2010 2011 2012P 2016P Met Thermal China's 2011 coal-fueled generation up 14% Net coal imports rise 14% to record 168 million tonnes GDP
Slide 9: Seaborne Markets Continue to Import Record Volumes: India
Seaborne Markets Continue to Import Record Volumes: India India's Needs Growing Significantly, Bolstering Asia Demand India's 2011 coal-fueled generation rises 9% Thermal imports rise 35% to 85 million tonnes GDP projected to grow 7.0% in 2012, 7.3% in 2013 Nearly 40 GW of coal-fueled generation exp
Slide 10: Major Build Out of Global Coal Generation Continues
Major Build Out of Global Coal Generation Continues New Coal-Fueled Generating Capacity 2011-2016 Gigawatts Rest of World India China Coal-fueled generation expected to grow 370+ GW by 2016 Additional 1.2+ billion tonnes of coal demand anticipated Vast majority of growth in China and India, driving
Slide 11: Steel Production Growth Expected to Drive Ongoing Met Coal Increases
Steel Production Growth Expected to Drive Ongoing Met Coal Increases 40% Steel Increase by 2020 = ~400 Million Tonnes Added Met Coal Global Steel Production Steel Production (million tonnes) 2010 2015P 2020P Seaborne met volumes expected to rise as much as 10 - 15% in 2012; could reach 300 million t
Slide 12: Australia to Supply Half the Growth in Seaborne Market Demand in 2012
Australia to Supply Half the Growth in Seaborne Market Demand in 2012 Global Seaborne Supply Growth 2011 - 2016 (Projected) Tonnes in Millions Other U.S. Colombia Mongolia Indonesia Australia 0 50 100 150 200 Why Australia? Top global coal exporting nation Predominant met coal supplier Delivers high
Slide 13: Global Coal Use Expected to Overtake Oil as Largest Energy Source by 2035
Global Coal Use Expected to Overtake Oil as Largest Energy Source by 2035 Coal Demand Growth (2009 - 2035) Energy Demand (Mtoe) 65% 2009 2035P Coal use grows due to abundance and cost advantages Projected energy growth from coal: 30% greater than natural gas growth Double oil growth Twice the curren
Slide 14: World's Fastest-Growing Economies Fueled by Coal
World's Fastest-Growing Economies Fueled by Coal Asia Represents 90% of 4.5 Billion Tonne Expected Demand Growth +315 +50 +1,080 +2,220 +100 +710 Coal Demand Growth 2009 - 2035 (Tonnes in Millions) U.S. growth presented in short tons. Source: World Energy Outlook 2011, International Energy Agency; A
Slide 15: Peabody's Global Platform Drives Results
Peabody's Global Platform Drives Results
Slide 16: Peabody Continues Global Expansion to Serve High-Growth Regions
Peabody Continues Global Expansion to Serve High-Growth Regions World's Only Global Pure-Play Coal Investment International Offices Brisbane New Delhi Newcastle Beijing London Urumqi Ulaanbaatar Singapore Essen Jakarta Balikpapan London Essen New Delhi Urumqi Ulaanbaatar Beijing Singapore Jakarta Ba
Slide 17: Peabody Delivers Strong Margins Superior to Coal Peer Average
Peabody Delivers Strong Margins Superior to Coal Peer Average Contributions to Gross Margins Lead Peers Gross Margins 2010 25% 28% 41% YTD 2011 NYSE Peer Avg. 25% Peabody U.S. 27% Peabody Australia 41% Peabody's U.S. and Australia margins surpass NYSE coal peers Leading producer in low-cost regions
Slide 18: Multiple Catalysts Driving Value Creation in 2012
Multiple Catalysts Driving Value Creation in 2012 Increasing metallurgical coal output 2012 sales target: 14-15 million tons Rising Australian thermal coal exports 2012 sales target: 12-13 million tons Delivering on multiple expansion projects Significant pipeline for future opportunities Fully comm
Slide 19: Key Focus Areas: Maintain Intense Focus on Operational Excellence
Peabody Key Focus Areas Maintain Intense Focus on Operational Excellence Build on 2011 record safety performance Drive improved productivity to control costs Lead process improvement Implement self-operator model at Wilpinjong and Millennium Mines 19
Slide 20: Key Focus Areas: Integrate Macarthur Acquisition into Australian Platform
Peabody Key Focus Areas Integrate Macarthur Acquisition into Australian Platform Upgrade operations to Peabody standards Rebuild larger operating footprint at Coppabella Increase major equipment utilization Begin to realize synergies in marketing, blending, logistics, operating, and financial areas
Slide 21: Key Focus Areas: Advance Organic Growth Projects
Peabody Key Focus Areas Advance Organic Growth Projects Ramp up from expansions at Wilpinjong, Millennium and Wambo Open-Cut Target first coal from Burton extension by year-end 2012 Advance projects in U.S. to meet demand for coal in fastest-growing regions
Slide 22: Australia Platform Expanding Through Organic Growth, Macarthur Acquisition
Australia Platform Expanding Through Organic Growth, Macarthur Acquisition Queensland Port Abbot Point Dalrymple Bay Gladstone Brisbane BTU Met Burton N. Goonyella Eaglefield Millennium MCC Mine Coppabella Moorvale Middlemount MCC Project Olive Downs Codrilla Vermont East/Wilunga New South Wales Por
Slide 23: Australia Organic Pipeline To Deliver Growth in 2012 and Beyond
Australia Organic Pipeline To Deliver Growth in 2012 and Beyond 2011 2012 2013 2014 2015 Wilpinjong 2 - 3 MTPY Thermal Millennium 1 - 2 MTPY SHCC/PCI Capex of ~ $275M Wambo Open-Cut 2 - 3 MTPY Thermal/PCI Middlemount ~2 MTPY SHCC/PCI Burton ~1MTPY HCC Metropolitan 1 MTPY HCC Capex of ~ $70M for expa
Slide 24: Key Focus Areas: Pursue Continued Deleveraging
Peabody Key Focus Areas Pursue Continued Deleveraging Target selective capital investments Ongoing review of growth capital to focus on high-return projects Sustaining capital remains low at $1.25 to $1.75 per ton Continue to evaluate asset portfolio Sale process announced for Wilkie Creek Emphasize
Slide 25: Peabody's Unmatched Asset Base Levered to the Strongest Markets
Peabody's Unmatched Asset Base Levered to the Strongest Markets Multiple Advantages Over NYSE Coal Peers BTU A B C D E F Low-Cost PRB Illinois Basin U.S. Thermal Exports Aus. Thermal Exports Seaborne Met Trading & Brokerage Global Diversification Multiple Asia Initiatives Little/No CAPP Exposure 25
Slide 26: Credit Suisse Energy Summit 2012
Credit Suisse Energy Summit 2012 Michael C. Crews Executive Vice President and Chief Financial Officer February 7-8, 2012 Peabody Energy Energizing The World One BTU At A Time