Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — BMO Conference 2020
26 slides from Fortescue's conference presentation, Feb 25, 2020
Slide 1: BMO Conference 2020
For personal use only BMO Conference 2020 24 February 2020 Elizabeth Gaines, Chief Executive Officer Global force Thriving communities
Slide 2: Important Notice
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 presentation contains certain statements w
Slide 3: A world class company
For personal use only A world class company Wholly owned, >1.3billion tonnes ~170 - 175mtpa fully integrated Shipped Shipping rate supply chain Core supplier to Industry leading China cost position 3
Slide 4: New corporate video placeholder
For personal use only • PLACEHOLDER – NEW CORPORATE VIDEO 4
Slide 5: Fully integrated supply chain
Fully integrated supply chain For personal use only Supported by a culture of innovation 6
Slide 6: Safety and unique culture
Safety and unique culture For personal use only 2.5 TRIFR Total Recordable Injury Frequency Rate on a 12 month rolling basis 38% Improvement compared to 31 December 2018 Reducing fatality risk profile 7
Slide 7: Communities benefit from our growth and development
For personal use only Communities Setting high benefit from standards our growth and Safeguarding the development environment Creating positive social change 8
Slide 8: 1H20 Highlights
1H20 Highlights For personal use only 88.6 million tonnes Shipped US $6.5 billion Revenue with average realised price of US$80 US $4.2 billion 65% Underlying EBITDA EBITDA margin US $2.5 billion US $0.7billion Net profit after tax (NPAT) Net debt at 31 December 2019 9
Slide 9: Price and margins
Price and margins For personal use only Strong underlying EBITDA margins through all market cycles US$/dmt 100 80 60 40 20 17 24 33 27 24 17 21 57 53 0 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 Underlying EBITDA margin Avg Underlying EBITDA 62 Platts CFR Index 10 Fortescue realised price Avg Fort
Slide 10: Shareholder returns
For personal use only Shareholder A $0.76 per share returns Fully franked interim dividend Dividend policy of a ratio 65% of 1H20 NPAT Dividend pay-out ratio of 50 to 80 per cent of full year NPAT A $1.60 per share Declared in the last 12 months 11
Slide 11: Credit metrics
Credit metrics For personal use only Target investment and credit metrics Gearing % Debt maturities profile (US$m) Target 30 – 40 % (Gross debt) (excluding leases) 69% 71% 56% 56% 45% 31% 62% 29% 750 750 49% 38% 21% 24% 16% 5% FY12 FY15 FY16 FY17 FY18 FY19 1H20 600 600 Net gearing Gross gearing 500
Slide 12: Investing in growth
Investing in growth For personal use only Eliwana Mine and Rail (US$m) Iron Bridge Magnetite (US$m) Pilbara Energy Connect (US$m) 700 - 800 1,200 1,200–- 1,300 1,300 Disciplined allocation to core business, innovation and growth 350 - 400 250 - 300 350 - 450 400 - 500 300 - 400 50 FY20 FY21 FY22 FY2
Slide 13: Eliwana project
Eliwana project For personal use only US$1.275 billion capital investment Progressing on schedule and budget Infrastructure Efficient design 143km rail; 30mtpa dry OPF Significantly smaller footprint compared to Firetail OPF Rail license granted Rail fleet Enabling construction and operation 126 ore
Slide 14: Iron Bridge Magnetite Project
Iron Bridge Magnetite Project For personal use only $2.6 billion investment delivering enhanced returns to shareholders and JV partners 22 mpta 67% Fe First ore on ship mid-2022 Low impurity premium concentrate product Design and procurement Bulk earthworks advanced commenced 15
Slide 15: Pilbara Energy Connect
Pilbara Energy Connect For personal use only US$700 million investment providing 25–30 per cent of stationary energy requirements from solar 16
Slide 16: Automated mining
Automated mining For personal use only Innovation delivering safety and productivity improvements AHS operation AHS conversion 40 million km safely travelled 158 trucks in operation Autonomous drills Advanced analytics 8 drills in operation Data driving efficiencies 17
Slide 17: Direct customer engagement driving deep market insights
Direct customer engagement For personal use only driving deep market insights A product mix that meets customers’ needs Aligning delivery with Marketing customers’ needs Ongoing operation and Responsive to marketing collaboration changing markets Co-location of key decision makers 18
Slide 18: Iron ore price
Iron ore price For personal use only Fortescue’s realised price increased by 73 per cent over 1H19 compared to a 38 per cent increase in the Platts 62% index 140 130 Optimising product mix 120 110 Steel mill margins 100 US/dmt 90 80 Strength in Chinese steel 70 production 60 50 40 Platts 62% IODEX P
Slide 19: Enhanced product mix
Enhanced product mix For personal use only Average realised price of US$80/dmt for 1H20 Product mix optimisation delivers value: West Pilbara Fines well Tonnes shipped millions (wmt) 1H20 Product Mix % 1H19 Product Mix % established West Pilbara Fines 9.0 10 0.4 0 Kings Fines 7.6 9 6.7 8 Fortescue L
Slide 20: Achieving our strategy to deliver majority of product over 60% Fe
Achieving our strategy to deliver majority of For personal use only product over 60% Fe Competitively positioned across allFortescue’s Increasing product segments average grade Flexibility to optimise margins through iron ore market cycles Iron Bridge will deliver highest grade Australian product 21
Slide 21: Safeguarding the environment
Safeguarding the environment For personal use only For future generations Commitment to the Paris UN Framework Convention Agreement on Climate Change Taskforce on Climate-related Voluntary short term targets Financial Disclosure reporting and long term goal 22
Slide 22: World class exploration
World class exploration For personal use only Opportunities will be driven by market demand across iron ore and other commodities Pilbara Extensive tenement footprint Australia NSW 3,000km2 tenure SA 15,000km2 tenure South America Ecuador, Argentina, Colombia 23
Slide 23: Guidance
For personal use only 170-175mt FY20 Shipments expected to be at the upper end of range Guidance US$12.75-$13.25 C1 cost / wmt US$2.4 billion Capital investment 24
Slide 24: Key strategic focus
For personal use only Key strategic focus Balance sheet Long term strength sustainability Growth and Enhanced returns development to shareholders 25
Slide 25: Vision and values
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Slide 26: For personal use only
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