Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — Investor Presentation (March 2013)
27 slides from Fortescue's investor presentation, Mar 19, 2013
Slide 1: Investor Presentation Hong Kong March 2013
For personal use only Investor Presentation Hong Kong March 2013
Slide 2: Disclaimer
Disclaimer For personal use only Important Notice The purpose of this presentation is to provide general information about Fortescue Metals Group Ltd ("Fortescue"). It is not recommended that any person makes any investment decision in relation to Fortescue based on this presentation. This presentat
Slide 3: Company overview
For personal use only Company overview 3
Slide 4: Fortescue
Fortescue World’s 4th biggest seaborne exporter For personal use only Strong culture delivers record results 35.7mt Top 20 ASX listed company record shipped in 1H13 8.5mt shipped in Dec 2012 15.6bt resource 100 mtpa mtpa December run rate 155 target 4
Slide 5: A differentiated model
A differentiated model Delivering results For personal use only Culture Fortescue’s unique culture is the key Relationships Direct relationships with sub contractors and local suppliers China Leveraging China’s growth and manufacturing capability Speed Speed of delivery – time is money Planning Plan
Slide 6: Highlights Half Year FY2013
Highlights Half Year FY2013 For personal use only • Record production results with 35.7mt shipped • Key expansion milestones delivered, 50mtpa new capacity Kings development resumed for 155 • Continuing safety improvement TRIFR decreasing 17% • US$5.0bn refinancing completed • Significant progress i
Slide 7: 30%+ growth across all areas
30%+ growth across all areas Continuing growth trajectory over FY2013 For personal use only Mining Processed Port Ore Mined (wmt) Ore Processed (wmt) Total Ore Shipped (wmt) 40.0 40.0 40.0 35.0 35.0 35.0 30.0 30.0 30.0 Million tonnes Million tonnes Million tonnes 25.0 25.0 25.0 20.0 20.0 20.0 15.0 1
Slide 8: The path to 155mtpa
For personal use only 8 The path to 155mtpa
Slide 9: Financials
For personal use only Financials 9
Slide 10: Financial Summary
Financial Summary Half Year FY2013 For personal use only • Revenue of US$3.3bn and EBITDA of US$1.1bn • Net profit after tax of US$478m • Tax US$263m and royalties US$194m paid • Refinancing US$5.0bn 10 10
Slide 11: EBITDA analysis
EBITDA analysis Increased volumes offset market volatility impact For personal use only 2,500 476 1,018 2,000 EBITDA variance (US$m) 1,534 1,500 156 1,134 10 7 26 43 1,000 500 - 1HFY12 Volume Price Costs Royalty Loan note Fx Other 1HFY13 re-estimation 32% increase in production offset by 42% decreas
Slide 12: Operating margins support
Operating margins support Fortescue’s average realised selling price and C1 costs For personal use only Production growth supports strong operating cash flows through the commodity cycle 12 12
Slide 13: Capital Expenditure
Capital Expenditure Half Year FY2013 For personal use only FY2011 FY2012 FY2013 FY2014 US$bn Actual Actual Forecast Indicative 155mtpa expansion 0.5 4.1 3.8 0.6 Operational capital 0.3 0.9 0.9 0.7 Other capital projects 0.6 0.3 0.2 0.3 Exploration 0.3 0.4 0.1 0.1 Fleet ‐ 0.4 1.3 0.2 Total 1.7 6.1 6.
Slide 14: Simplified debt capital structure
Simplified debt capital structure Increased flexibility with new debt maturity schedule For personal use only $5.0 $4.5 $4.0 NO DEBT REPAYMENT $3.5 until November 2015 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 CY2012 CY2013 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 CY2021 CY2022 Senior Secured Credi
Slide 15: Capital management
Capital management Half Year FY2013 For personal use only • Flexible debt maturity profile • Continued drive to reduce operating costs • Disciplined capital allocation to key projects • De-gear balance sheet • Adopt a profit payout ratio dividend policy 15 15
Slide 16: Market
For personal use only Market 16
Slide 17: Long term confidence in China
Long term confidence in China Lower growth rates but still strong in absolute volumes For personal use only • Strong underlying economy >7% GDP growth • New leaders committed to growth • Urbanisation & infrastructure driving steel demand • Targeted infrastructure stimulus packages • Short term steel
Slide 18: China steel intensity below global averages
China steel intensity below global averages Developed economies have spent 40+ years consuming more than 500kg of For personal use only steel per person – China is yet to reach this level Steel Intensity & GDP 1850-2012 (smoothed) kg/capita 1,400 Korea 1,200 1,000 Taiwan 800 Japan 600 Germany China
Slide 19: History shows price volatility
For personal use only $80 $90 $100 $110 $120 $130 $140 $150 $160 $170 $180 $190 $200 Jul‐10 Aug‐10 Sep‐10 Oct‐10 Nov‐10 Dec‐10 Jan‐11 Feb‐11 Mar‐11 Apr‐11 May‐11 Jun‐11 Jul‐11 Aug‐11 Sep‐11 Oct‐11 Strong rebounds follow price drops Nov‐11 Dec‐11 Jan‐12 Feb‐12 Mar‐12 Apr‐12 May‐12 Jun‐12 History show
Slide 20: Clear Strategy
For personal use only Clear Strategy 20
Slide 21: Moving down the global cost curve
Moving down the global cost curve Targeting bottom quartile For personal use only 200 Domestic Chinese Ore Australia Brazil US$/dry tonne CFR equivalent India 150 South Africa Other Firetail & Kings to reset the cost base 100 50 0 0 100 200 300 400 500 600 700 800 900 1,000 Cumulative mt (wet, as de
Slide 22: Flexible design for future growth
Flexible design for future growth Fifth berth approved For personal use only Fortescue * 120mtpa minimum guaranteed allocated priority capacity 22 22
Slide 23: Fortescue's dominant Pilbara land position
Fortescue’s dominant Pilbara land position For personal use only Fortescue: 85,000km2 Rio: 14,230km2 BHP: 8,195km2 23
Slide 24: Resource portfolio sets expansion platform
Resource portfolio sets expansion platform To leverage existing assets for low cost growth For personal use only 18,000 Annualised growth of 1.5bt 16,000 14,000 Mineral Resources (Mt) 5,205 12,000 per annum 3,236 10,000 2,465 2,463 8,000 2,013 1,032 624 624 624 1,230 6,000 1,230 3,247 3,070 3,070 2,
Slide 25: Delivering on targets
Delivering on targets For personal use only Strong financial results Expansion to 155mtpa Deleverage following expansion Flexible incremental growth Unique culture drives performance 25
Slide 26: Proudly supporting
For personal use only Proudly supporting: Sign up to alerts online: www.fmgl.com.au
Slide 27: Glossary
Glossary Definition of non-IFRS terms For personal use only EBITDA = profit before income tax adjusted for depreciation and amortisation, net finance expenses and refinancing costs Return on equity = profit for the year after income tax divided by total equity Cash flow per share (CFPS) = net cash i
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