Yancoal Australia Ltd. · ASX:YAL
Yancoal Australia — Shareholder Meeting (May 2019)
31 slides from Yancoal Australia's shareholder meeting presentation, May 31, 2019
Slide 1: Annual General Meeting
For personal use only Yancoal Australia Ltd Annual General Meeting Australia’s Largest Pure-play Coal Producer 31 May 2019 1
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer Acceptance This presentation is issued by Yancoal Australia Limited ABN 82 111 859 119 (Yancoal). For personal use only By attending Yancoal’s annual general meeting, or accepting, accessing or reviewing this presentation, you acknowledge and agree to the terms set ou
Slide 3: Important Notice and Disclaimer (Continued)
Important Notice and Disclaimer (Continued) Reserves and Resources Reporting In this presentation, references to mineral resources (Resources) and ore reserves (Reserves) for Yancoal are compliant with the Australasian Code for Reporting of Exploration Results, Mineral For personal use only Resource
Slide 4: Chief Executive Officer Reinhold Schmidt
For personal use only CHIEF EXECUTIVE OFFICER Reinhold Schmidt 4
Slide 5: Highlights
Highlights For personal use only Over A$1Bn of debt repayments Sustained improvement in safety made in 2018 – leverage and performance gearing reduced to 1.4x and 71% respectively(1) Full year dividend of A$507MM Record total of 32.9Mt attributable implying payout ratio of ~60% of saleable productio
Slide 6: Safety Performance
Safety Performance Commitment to operating mines to the highest safety standards. Core Hazard Critical Control For personal use only development and implementation continued throughout the year Yancoal Total Recordable Injury Frequency Rate(1) Yancoal Lost Time Injury Frequency Rates(1) Rolling 12 M
Slide 7: Record Operating EBITDA
Record Operating EBITDA Operating performance delivered record operating EBITDA of A$2,180MM and NPAT of A$852MM For personal use only Operating EBITDA and EBITDA Margin(1) Net Profit After Tax (A$MM) | (%) (A$MM) 3,000 50% 900 852 45% 2,400 38% 40% 600 2,180 1,800 30% 300 229 1,200 20% 988 14% 0 60
Slide 8: Coal Production
Coal Production Significant expansion post completion of Coal & Allied acquisition and record production from Moolarben For personal use only Saleable Production by Asset (100% Basis) Comments (Mt) 60 12.1 18.5(1) 32.9(2) • Record 2018 total of 50Mt gross saleable coal production, up 59% on the prio
Slide 9: Our Proposition to Drive Shareholder Returns
Our Proposition to Drive Shareholder Returns For personal use only Australia’s largest pure-play coal producer and the largest HKSE-listed exporter of high quality seaborne thermal coal World class large-scale coal mines which produce high value export coal and operate at industry-leading cash m
Slide 10: END
For personal use only END Strength, Performance, Profit 10
Slide 11: Additional Information
ADDITIONAL INFORMATION For personal use only • The following slides were not presented during the Annual General Meeting, and are provided for the information of shareholders and interested parties. 11
Slide 12: Operational Performance
For personal use only Operational Performance Strength, Performance, Profit 12
Slide 13: Hunter Valley Operations
Hunter Valley Operations World-class tier one thermal coal asset – operating synergies realised with potential for mine extension For personal use only through JV with Glencore Key Metrics Saleable Coal Production (Mt) (100% basis) (2) Production (Mt) Location New South Wales, Australia 15.0 13.3 Mi
Slide 14: Mount Thorley Warkworth
Mount Thorley Warkworth World-class tier one thermal coal asset – integrated operation of two open cut mines with potential For personal use only underground opportunity being assessed Key Metrics Saleable Coal Production (Mt) (100% basis) (2) Production (Mt) Location New South Wales, Australia 15.0
Slide 15: Moolarben
Moolarben World-class tier one thermal coal asset – integrated operation of two mines (one open cut and one For personal use only underground) after successful underground expansion in 2017 Key Metrics Saleable Coal Production (Mt) (100% basis) Production (Mt) Location New South Wales, Australia 18.
Slide 16: Financial Performance
For personal use only Financial Performance Strength, Performance, Profit 16
Slide 17: Record Operating EBITDA
Record Operating EBITDA Operating performance delivered record operating EBITDA of A$2,180MM and NPAT of A$852MM For personal use only Operating EBITDA and EBITDA Margin(1) Net Profit After Tax (A$MM) | (%) (A$MM) 3,000 50% 900 852 45% 2,400 38% 40% 600 2,180 1,800 30% 300 229 1,200 20% 988 14% 0 60
Slide 18: Driving Continued Deleveraging
Driving Continued Deleveraging Balance sheet materially strengthened and well-poised to deliver future growth and shareholder returns For personal use only Net Debt(1) and Leverage Ratio(2) (A$MM) | (x) 27.7x 6,000 30.0x Voluntary repayments of: • US$750MM in 2018; and 4,800 4,761 4,516 24.0x • US$5
Slide 19: Payment of Dividends
Payment of Dividends Dividend payments of A$507MM in 2018 with a target payout ratio of 50% of NPAT for 2019 For personal use only Dividends for 2018 Net Profit After Tax 2018 A$852MM Payout Ratio ~60% A$507MM Dividends Paid(1) 2018 (incl. A$166MM special div.) Market Capitalisation(2) 22 Feb 2019 A
Slide 20: Strategy
For personal use only Strategy Strength, Performance, Profit 20
Slide 21: Core Beliefs and Values
Core Beliefs and Values Yancoal asks its sites and corporate functions to operate to the highest governance standards For personal use only - Applying transparent, compliant and efficient processes to meet the needs of all stakeholders; and - Underpinned by Yancoal’s core values starting with its pe
Slide 22: Prioritising Capital Returns and Asset Reinvestment
Prioritising Capital Returns and Asset Reinvestment Utilising operating cash flows to (1) reinvest in the operations, (2) reward shareholders through dividends, For personal use only (3) reduce debt and optimise loan facilities, and (4) pursue growth both organic and through M&A Yancoal Capital Allo
Slide 23: Community Engagement
Community Engagement In 2018, the Yancoal Community Support Program invested more than $800,000 into local initiatives For personal use only across Australia Recent Examples of Yancoal-Supported Community Initiatives • $600,000 over 3 years to enable two full-time researchers to QUT’s Cancer and Age
Slide 24: Outlook
For personal use only Outlook Strength, Performance, Profit 24
Slide 25: Guidance for 2019
Guidance for 2019 For personal use only Yancoal is aiming to balance long-term deleveraging with shareholder returns by: • Targeting a long term Net Debt / Operating EBITDA Leverage Ratio of <1.5x • Setting a target 2019(1) dividend payout ratio of 50% of Net Profit After Tax Operational guidance: •
Slide 26: Well-positioned for Growth
Well-positioned for Growth Our large-scale and long-life asset base contains several organic growth initiatives which have the For personal use only potential to deliver material value for shareholders Large-scale and long-life asset base… …with growth projects that could drive material value for sh
Slide 27: Demand for High Quality Coal Expected to Remain
Demand for High Quality Coal Expected to Remain Regulatory landscape means power generators are increasingly focused on securing coal with a high For personal use only energy content Power generators are focused on improving thermal efficiency …which should drive demand for high quality Australian p
Slide 28: Demand Driving Premium Pricing on High Quality Coal
Demand Driving Premium Pricing on High Quality Coal Demand dynamics are driving premium pricing for coals with higher energy content For personal use only Premium pricing being realised for higher energy coal Newcastle 6,000 kcal/kg vs 5,500 kcal/kg NAR Price 140 90% 80% 120 70% 100 60% Premium / Di
Slide 29: Appendices
For personal use only Appendices Strength, Performance, Profit 29
Slide 30: Portfolio Overview
Portfolio Overview A diversified portfolio of world-class coal assets comprising interests in 9 mines with supporting rail and For personal use only port infrastructure Yancoal’s Portfolio Asset Overview(1) Saleable Production Marketable Abbot Point South Location Ownership Reserves(3) Resources(4)
Slide 31: Reserves and Resources By Mine
Reserves and Resources By Mine As at 31 December 2018, Yancoal has Coal Reserves of 1,763Mt, Marketable Coal Reserves of 1,265Mt and For personal use only Coal Resources of 8,878Mt (on 100% basis) • On an attributable basis, Yancoal’s Coal Reserves were 1,240Mt, Marketable Coal Reserves were 891Mt a