Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — Macquarie Conference 2017
24 slides from Fortescue's conference presentation, May 4, 2017
Slide 1: Macquarie Conference 2017
For personal use only Macquarie Conference 2017
Slide 2: Forward looking statements
Forward looking statements For personal use only Important Notice Additional Information The purpose of this presentation is to provide general information about This presentation should be read in conjunction with the Annual Report at 30 Fortescue Metals Group Limited ("Fortescue"). It is not recom
Slide 3: Building a world class company
Building a world class company Core supplier to China’s growth For personal use only Safety focus First ore Low cost Engagement Empowerment Leadership in 2008 producer Shipped over 165-170mt Production rate 850mt Unique culture 3
Slide 4: Delivering on targets
Delivering on targets For personal use only Focus on safety, productivity and efficiency Safety TRIFR reduced 33% to 2.9 165-170mtpa shipped Productivity + efficiency Low cost global producer Debt repayment priority Consistent dividend policy 4
Slide 5: Placeholder – new corporate video
For personal use only • PLACEHOLDER – NEW CORPORATE VIDEO 5
Slide 6: Continuous + sustainable cost improvements
Continuous + sustainable cost improvements For personal use only Focus on productivity and efficiency delivering cost savings US$/wmt 1 Solomon operations 60 50 48 44 2 Blending strategy 58% Fe 40 34 3 Processing, wet plants + de-sands 30 27 15 4 Operational efficiencies 20 10 $12 - $13 12-13 5 Fx a
Slide 7: Moving down the global cost curve
Moving down the global cost curve For personal use only China's Iron Ore Supply CFR Costs (including royalties & ocean freight) 2012 2017 Source: Metalytics – March 2017 7
Slide 8: March quarter FY17 financial outcomes
March quarter FY17 financial outcomes For personal use only Productivity initiatives delivering sustainable cost reductions and financial results C1 Cost $13.06/wmt US$2.7bn 39.6mt FY17 US$12-13 Debt repaid Shipped for the quarter US$4.3bn US$1.5bn 22% Gross Debt Cash on hand Net gearing 8
Slide 9: Debt repayments
Debt repayments For personal use only US$8.4bn of debt repaid since expansion complete improving gross gearing to 31% Refer to attached glossary for definition of non-IFRS terms 9
Slide 10: Debt maturity proforma at March 2017
Debt maturity proforma at 31 March 2017 For personal use only US$2.7bn repaid in FY17 with flexibility to continue voluntary early repayments 5,000 4,500 4,000 3,500 3,000 US$m 2,500 2,000 1,500 1,000 2,160 976 500 478 0 0 CY2017 CY2018 CY2019 CY2020 CY2021 CY2022 Term Loan Senior Unsecured Notes Se
Slide 11: Market
For personal use only Market
Slide 12: China’s 13th Five Year Plan (2016-2020)
China’s 13th Five Year Plan (2016-2020) For personal use only RMB12.5 trillion for ~ 11,000 listed projects New power 3,000km 152,000km New urban projects rail lines Roads in rural areas +480,000 MW 80% cities Over 50 Pipelines with high civilian + speed rail airports gas storage Source: China Daily
Slide 13: Core supplier to Asia
Core supplier to Asia For personal use only Well established 17% market share of imported iron ore to China Total 2016 global steel production 1,629mt • Low impurity 58% Fe average • Competitive value in use 541 808 • Large diverse customer base 79 • Responsive to market needs 96 105 • Proximity to
Slide 14: Developing and emerging Asia
Developing and emerging Asia For personal use only Asian economies generating two thirds of global growth Source: IMF World Economic Database Oct 2016 14
Slide 15: Steel capital stock tonnes/capita
For personal use only Steel capital stock tonnes/capita - 2 4 8 6 10 12 14 16 1950 1952 1954 1956 1958 1960 1962 1964 1966 Source: NBS, worldsteel, Macquarie, February 2017 1968 1970 USA 1972 1974 1976 1978 1980 1982 1984 1986 Japan 1988 1990 1992 1994 Steel stock tonnes per capita 1996 1998 2000 Ch
Slide 16: Iron ore inventory levels
For personal use only Mt 20 40 60 80 0 100 120 140 180 160 Jul-10 Sep-10 Nov-10 Source: Bloomberg and Umetal Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Iron ore inventory levels Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-
Slide 17: Supporting our community
Supporting our community For personal use only
Slide 18: Creating positive social change
Creating positive social change For personal use only Creating opportunities through training, employment and business development 18
Slide 19: Championing diversity
Championing diversity For personal use only Workplace culture fundamental 19 19
Slide 20: Focussed strategy
For personal use only Focussed strategy
Slide 21: Key strategic focus
Key strategic focus For personal use only Disciplined value creation Debt repayment and capital flexibility Long term sustainability of iron ore Create low cost growth options - Leverage skills and culture - Exploration and early stage development Returns to shareholders 21 21
Slide 22: The new force in iron ore
The new force in iron ore For personal use only Continuous improvement Sustainable low cost World class producer assets & people Customer focus Unique culture Reliable drives performance Competitive 22
Slide 23: For personal use only
For personal use only www.fmgl.com.au @FortescueNews Proudly supporting:
Slide 24: Glossary
Glossary For personal use only C1: Operating costs of mining, processing, rail Underlying EBITDA: Earnings before interest, tax, depreciation and amortisation, and port on a per tonne basis, including exploration, development and other expenses. The reconciliation of allocation of direct administrat