Iluka Resources Limited · ASX:ILU
Iluka Resources — Shareholder Meeting (May 2016)
66 slides from Iluka Resources's shareholder meeting presentation, May 18, 2016
Slide 1: Iluka Resources Limited 2016 Annual General Meeting
ANNUAL GENERAL MEETING 20 16 Iluka Resources Limited Iluka Resources Limited 2016 2016 Annual Annual General General Meeting Meeting 2016 ANNUAL GENERAL MEETING PERTH, Perth, WESTERN AUSTRALIA Western Australia Perth, 18 18 May Western 2016 Australia May 2016 18 May 2016
Slide 2: Greg Martin, Chairman
Greg Martin Chairman 2
Slide 3: Evacuation Points
y Evacuation Points muKA 1 \ ejb
Slide 4: Please turn off your mobile phone
PLEASE TURN OFF YOUR MOBILE PHONE 4
Slide 5: Iluka Board of Directors
Iluka Board of Directors Greg Martin David Robb Gavin Rezos Jenny Seabrook Wayne Osborn Hutch Ranck Marcelo Bastos Xiaoling Liu Chairman Managing Director 5
Slide 6: Xiaoling Liu
Xiaoling Liu 6
Slide 7: Marcelo Bastos
Marcelo Bastos 7
Slide 8: James (Hutch) Ranck
James (Hutch) Ranck 8
Slide 9: Wayne Osborn
Wayne Osborn People and Performance Committee Chair 9
Slide 10: Jenny Seabrook
Jenny Seabrook Audit and Risk Committee Chair 10
Slide 11: Gavin Rezos
Gavin Rezos 11
Slide 12: David Robb
David Robb Managing Director and CEO 12
Slide 13: Cameron Wilson
Cameron Wilson 13
Slide 14: 2016 Annual General Meeting
ANNUAL GENERAL MEETING 20 16 2016 Annual General Meeting 14
Slide 15: Chairman's Address
ANNUAL GENERAL MEETING 20 16 Chairman’s Address 15
Slide 16: Directors' and Statutory Information
G ILUKA G senna 20 G 0 ILUKA 15 ILUKA oman 2 DIRECTORS’ AND STATUTORY INFORMATION 16
Slide 17: Financial Position, Results, CEO Transition, Governance
Financial Position • Financial results • Managing Director/CEO transition • Governance and Board matters 17
Slide 18: Health and Safety Focus
G ILUKA Health and Safety Focus Injury frequency rates Total Recordable Injury Frequency Rate (TRIFR) || Lost Time Injury Frequency Rate (LTIFR) 18
Slide 19: Environmental Performance 2014 - 2015
Environmental Performance 2014 - 2015 Metric 2014 2015 Trend Level 1 environmental incidents 1,002 777 Level 2 environmental incidents 154 97 Level 3 environmental incidents 30 11 Level 4 environmental incidents 4 3 Level 5 environmental incidents 0 0 Total environmental incidents 1,190 887 19
Slide 20: Rehabilitation – Jacinth
Rehabilitation – Jacinth Initial rehabilitation of mined areas at Jacinth, Eucla Basin South Australia 20
Slide 21: Chairman's Address
ANNUAL GENERAL MEETING 20 16 Chairman’s Address 21
Slide 22: Financial Performance
ANNUAL GENERAL MEETING 20 16 Financial Performance 22
Slide 23: 2015 Financial Performance - Overview
2015 Financial Performance - Overview Low cycle conditions - prices and sales volumes impacting financials • Revenue of $819 million (previous 3 year average $853 million) • NPAT of $53.5 million (previous 3 year average $106 million) • Return on shareholders’ equity 3.8% (previous 3 year average 6.
Slide 24: Chairman's Address
ANNUAL GENERAL MEETING 20 16 Chairman’s Address 24
Slide 25: Managing Director/CEO Transition
ANNUAL GENERAL MEETING 20 16 Managing Director/CEO Transition 25
Slide 26: Governance and Board Matters
ANNUAL GENERAL MEETING 20 16 Governance and Board Matters 26
Slide 27: Dr Xiaoling Liu, Non-executive Director
Dr Xiaoling Liu, Non-executive Director PhD (Extractive Metallurgy) BEng (Extractive Metallurgy) GAICD, FAUSIMM • Former President and CEO Rio Tinto Minerals • 26 years with Rio Tinto Group – smelting operational management roles • Former Research Fellow, City University London 27
Slide 28: Board Committees
Board Committees Board Committees Members Wayne Osborn (Chair) Greg Martin People and Performance Committee Gavin Rezos Jenny Seabrook James (Hutch) Ranck Greg Martin (Chair) Jenny Seabrook Gavin Rezos Nominations Committee James (Hutch) Ranck Wayne Osborn Marcelo Bastos Xiaoling Liu Jenny Seabrook
Slide 29: Chairman's Address
ANNUAL GENERAL MEETING 20 16 Chairman’s Address 29
Slide 30: Managing Director's Address
ANNUAL GENERAL MEETING 20 16 Managing Director’s Address 30
Slide 31: Low Cycle Demand Conditions
Low Cycle Demand Conditions 2010-2011 2015 US$/t Weighted Average Price Average Zircon Price 1,380 986 Rutile Price 865 721 31
Slide 32: Commodity Price Relativities
Commodity Price Relativities Historical monthly commodity prices and mineral sands prices (indexed) Index (2005=100) 700 600 500 Copper 400 Iron Ore Nickel 300 Zinc 200 Rutile Zircon 100 - Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09
Slide 33: Managing Director's Address
ANNUAL GENERAL MEETING 20 16 Managing Director’s Address 33
Slide 34: 2014 – 2016 Production Settings
2014 – 2016 Production Settings 2014 2015 2016 Mining and Concentrating suspended Jacinth-Ambrosia mining, South Australia 100% utilisation 100% utilisation from 16 April Concentrate to be processed 100% utilisation WRP mine idled March at end of Idled concentrate continues to be Murray Basin mining
Slide 35: Financial Characteristics
Financial Characteristics Net Debt, Gearing and Funding Headroom $m Gearing % 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 -200 -10 1H 10 2H 10 1H 11 2H 11 1H 12 2H 12 1H 13 2H 13 1H 14 2H 14 1H 15 2H 15 Total facilities Net debt (cash) Gearing • No debt – net cash of $6 million (debt of $55 mi
Slide 36: Mineral Sands Market Conditions
ANNUAL GENERAL MEETING 20 16 Mineral Sands Market Conditions 36
Slide 37: Zircon Market
Zircon Market • Total zircon sales flat • 2015: 346 thousand tonnes (2014: 352 thousand tonnes) • 2015: Weighted average price US$961/t (2014: US$1,024/t) Americas EMEAI China / Asia 2014 vs 2015 Sales Ceramics Zirconium 252 kt 252 kt Chemicals Fused Zirconia Refractories 69 kt 47 kt 53 kt 25 kt Fou
Slide 38: Suspension of Mining and Concentrating
Suspension of Mining and Concentrating Mining and processing area Jacinth-Ambrosia, Eucla Basin, South Australia 38
Slide 39: Zircon Market
Zircon Market 2016 year-to-date • Zircon demand lower in March for price-related reasons • Rumoured price reduction by a major Iluka competitor • Iluka ASX Release 7 April – Zircon Reference Price reduced by ~10% to ~US$950/tonne1 • European zircon demand firmer • Americas demand stable • Recovery i
Slide 40: High Grade Feedstock Markets
High Grade Feedstock Markets • Rutile / synthetic rutile sales up • 2015: 305 thousand tonnes (2014: 264 thousand tonnes) • SR kiln 2 reactivated Americas EMEAI China / Asia 2014 vs 2015 Sector Sales 155 kt 142 kt 121 kt Pigment 81 kt 42 kt Welding 2015 29 kt 2014 Ti Sponge / Other 2014 2015 2014 20
Slide 41: High Grade TiO2
High Grade TiO2 2016 year-to-date • Higher rutile/SR production forecast for 2016 • Majority of Iluka rutile and synthetic rutile contracted for 2016 • Demand for pigment (largest feedstock market) improved since end of 2015 • Increased pigment demand and low inventories – series of price increases
Slide 42: Unit Costs and Unit Revenue – 2016 Trend
Unit Costs and Unit Revenue – 2016 Trend Production, Revenue per tonne Sold and Unit Cash Costs / COGS $1030/t $1136/t $862/t $780/t $668/t $558/t • 2016 trend - lower cash costs of production; lower unit cash costs • COGS should inform modeling - refer Iluka’s Key Physical and Financial Parameters
Slide 43: Managing Director's Address
ANNUAL GENERAL MEETING 20 16 Managing Director’s Address 43
Slide 44: Capital Management Trend
; GY Capital Management Trend LuKa A$Sm Gearing (%) 60 45 30 15 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 mmm Cash from operations mmm Disposals == Equity issued mmm Net debt drawn mms Net capex mam Acquisitions mums Dividends paid mum Net debt repaid —?— Net cash/net debt ---Gearing
Slide 45: Managing Director's Address
ANNUAL GENERAL MEETING 20 16 Managing Director’s Address 45
Slide 46: Balanced Apportionment of 2015 Cash Flow
Balanced Apportionment of 2015 Cash Flow 2015 Operating Cash Flow Usage ($m) Innovation & Tech Debt Reduction $28.0 Exploration $75.5 $27.7 Tapira $2.7 Free Cash Flow Investment $155m $125m Capex $62.3 Fully Franked Dividends $79.5 Metalysis $4.1 Net cash inflow from operating activities in the 2015
Slide 47: Managing Director's Address
ANNUAL GENERAL MEETING 20 16 Managing Director’s Address 47
Slide 48: Formal Business of the Meeting
ANNUAL GENERAL MEETING 20 16 Formal Business of the Meeting 48
Slide 49: Proxies Received for the Meeting
Proxies Received for the Meeting • Proxies received: – 330.8 million shares – 79% of issued shares 49
Slide 50: Formal Business of the Meeting
ANNUAL GENERAL MEETING 20 16 Formal Business of the Meeting 50
Slide 51: Annual Financial Report
ANNUAL GENERAL MEETING 20 16 Annual Financial Report 51
Slide 52: Shareholder Questions
ANNUAL GENERAL MEETING 20 16 Shareholder Questions 52
Slide 53: Ordinary Resolutions
ANNUAL GENERAL MEETING 20 16 Ordinary Resolutions 53
Slide 54: Green Voting Card
Green Voting Card land write in the AGAINST box the actual number or percentage of votes you are casting against the motion. The sum of the votes cast or the percentages FOR and AGAINST a motion ANNUAL GENERAL MEETING must net exceed your voting entitlement oF 100%, 418 MAY 2016 PROXYHOLDER VOTING I
Slide 55: Election of Director: Xiaoling Liu
Resolution 1 Election of Director • Xiaoling Liu Xiaoling Liu 55
Slide 56: Resolution 1
Resolution 1 Election of Director • Xiaoling Liu Proxies Received For 329,185,389 Against 735,355 Proxy’s discretion 889,973 Abstain 79,514 56
Slide 57: Re-election of Director: Gregory Martin
Resolution 2 Re-election of Director • Gregory Martin Gregory Martin 57
Slide 58: Resolution 2
Resolution 2 Re-election of Director • Gregory Martin Proxies Received For 329,353,605 Against 588,807 Proxy’s discretion 896,473 Abstain 51,346 58
Slide 59: Re-election of Director: James (Hutch) Ranck
Resolution 3 Re-election of Director • James (Hutch) Ranck James (Hutch) Ranck 59
Slide 60: Resolution 3
Resolution 3 Re-election of Director • James (Hutch) Ranck Proxies Received For 329,325,385 Against 596,371 Proxy’s discretion 908,753 Abstain 59,722 60
Slide 61: Resolution 4: Adoption of Remuneration Report
Resolution 4 Adoption of Remuneration Report 61
Slide 62: Wayne Osborn
Wayne Osborn People and Performance Committee Chair 62
Slide 63: Resolution 4: Adoption of Remuneration Report
Resolution 4 Adoption of Remuneration Report 63
Slide 64: Resolution 4
Resolution 4 Adoption of Remuneration Report Proxies Received For 327,788,037 Against 1,787,124 Proxy’s discretion 895,682 Abstain 418,387 64
Slide 65: Green Voting Card
Green Voting Card @ ILUKA Iluka Resources Limited ABN 34 008 675 018 ANNUAL GENERAL MEETING 418 MAY 2016 SHAREHOLDER/PROXYHOLDER ADMISSION & VOTING CARD THE DIRECTORS OF ILUKA RESOURCES LIMITED. THANK YOU FOR YOUR ATTENDANCE PLEASE RETAIN THIS CARD UNTIL THE CLOSE OF THE MEETING ANNI Please read the
Slide 66: Iluka Resources Limited 2016 Annual General Meeting
ANNUAL GENERAL MEETING 20 16 Iluka Resources Limited 2016 Annual General Meeting PERTH, WESTERN AUSTRALIA 18 May 2016 66