Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — BMO Miami 2016
27 slides from Fortescue's conference presentation, Mar 2, 2016
Slide 1: BMO Miami 2016
For personal use only BMO Miami 2016 Working together. Delivering results.
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 165mt Production rate 620mt Unique culture 3
Slide 4: For personal use only
SC) Fortescue Lee G FOr person
Slide 5: For personal use only
For personal use only 5
Slide 6: Our Vision: The safest, lowest cost, most profitable iron ore producer
Our Vision: The safest, lowest cost, most profitable iron ore producer 4: Ww Fortescue Integrity Determination Set yourself Enthusiasm Empowerment Generating ideas Frugality
Slide 7: Strategic delivery of targets
Strategic delivery of targets For personal use only Focus on safety, productivity and efficiency and response to market 165mt achieved & maintained Cost target $13/t June 16 Sustaining capex below $2/t Net debt $6.1bn Consistent dividend policy 7
Slide 8: 1HY16 Earnings
1HY16 Earnings For personal use only Operational performance and sustainable cost reductions support financial results Underlying NPAT EBITDA 1 84mt shipped US$319m Rate maintained US$1.3bn Capex $88m Net debt Interim dividend A$0.03/share 1HFY16 US$1.1bn lower 1 Refer to attached glossary for defin
Slide 9: Continuous, sustainable cost improvements
Continuous, sustainable cost improvements For personal use only Through development of assets, efficiencies, productivity and cost savings US$/wmt 1 Solomon operations 60 50 48 44 2 Blending strategy 58% Fe 40 34 3 Processing, wet plants + de-sands 30 27 20 15 4 Operational efficiencies Exit FY16 at
Slide 10: Breakeven index price
Breakeven index price For personal use only Continuing to reduce breakeven price US$/t 40 USD:AUD 0.71 3.3 28.8 30 2.5 1.5 23.0 3.2 20 0.4 18.3 1.4 3.5 13.0 10 0 C1 exit rate Shipping Royalty Admin Delivered Interest Sustaining Total wmt Moisture Dmtu Breakeven cost to China capex cost adjustments p
Slide 11: Operating and financial performance
For personal use only Operating and financial performance
Slide 12: Underlying EBITDA
Underlying EBITDA For personal use only Cost and production performance offsetting price weakness Underlying EBITDA, US$ millions Cash savings since achieving full operating capacity US$bn 1,387 4.0 3.0 0.8 1,440 27 96 1,301 2.0 1.1 54 27 3.5 1,568 2.7 0.8 1.0 0.8 HY15 Volume Cost Price Royalty Fx O
Slide 13: Balance sheet
For personal use only Balance sheet
Slide 14: Debt maturity profile
Debt maturity profile For personal use only Net debt reduced by US$4.4bn to date US$ millions 5,000 4,839 4,000 3,000 2,000 1,000 2,160 Extended Runway 577 478 0 CY2016 0 CY2017 CY2018 CY2019 CY2020 CY2021 CY2022 Senior Secured Credit Facility Senior Unsecured Notes Senior Secured Notes 14
Slide 15: Market
For personal use only Market
Slide 16: Core supplier to Asia
Core supplier to Asia For personal use only Well established 17% market share of imported iron ore to China • Low impurity 58% Fe average • High value in use • Large diverse customer base • Reliable consistent delivery • Proximity to high growth region 16
Slide 17: Steel consumption to build economy
Steel consumption to build economy Above 800mtpa – driven by policy decisions For personal use only Source: Wood Mackenzie 17
Slide 18: Iron ore supply in balance…sentiment driving price
Iron ore supply in balance…sentiment driving price For personal use only Port stocks remaining stable Days Coverage US$ 50 $210 IO Inventory days coverage (days) $190 62% Fe CFR (RHS) 40 $170 $150 30 $130 $110 20 $90 $70 10 $50 0 $30 Oct-10 Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr
Slide 19: Reserves and resources
For personal use only Reserves and resources
Slide 20: Resource portfolio supports asset base
Resource portfolio supports asset base For personal use only Largest Pilbara tenement footprint 12,000 2,463 2,463 Mineral Resources dry in situ (Mt) 10,000 2,463 740 740 8,000 2,013 624 1,032 624 624 6,000 4,877 4,793 3,504 3,070 3,070 2,860 4,000 2,224 1,715 695 303 491 695 695 5,504 695 695 695 5
Slide 21: Supporting our local community
For personal use only Supporting our local community
Slide 22: Ending Aboriginal disparity in the Pilbara
Ending Aboriginal disparity in the Pilbara For personal use only Creating opportunities through training, employment and business opportunity 22
Slide 23: Focused strategy
For personal use only Focused strategy
Slide 24: 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) 2015 Source: Metalytics 25
Slide 25: The new force in iron ore
The new force in iron ore For personal use only Focused strategy delivering results Sustainable low cost World class producer assets & people 165mt Unique culture drives performance Production rate 25
Slide 26: For personal use only
For personal use only www.fmgl.com.au @FortescueNews Proudly supporting:
Slide 27: Glossary
Glossary For personal use only C1: Operating costs of mining, processing, rail and port. The reconciliation of C1 to the amounts disclosed in the financial statements prepared under the Australian accounting standards is provided in the Financial Report for the half year ended 31 December 2015 accom