Om Holdings Ltd. · ASX:OMH
Om — Non-Deal Roadshow (September 2008)
37 slides from Om's roadshow presentation, Sep 9, 2008
Slide 1: Analyst Road Show Presentation ASX cover letter
OM HOLDINGS LIMITED (ARBN 081 028 337) For personal use only NO. OF PAGES LODGED: 37 9 September 2008 Company Announcements Office ASX Limited 4th Floor 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam ANALYST ROAD SHOW PRESENTATION Please find attached a copy of an analyst’s road show presentation t
Slide 2: Background Profile of OM Holdings Limited
BACKGROUND PROFILE OF OM HOLDINGS LIMITED For personal use only OMH listed on the ASX in March 1998 and has its foundations in metals trading – incorporating the sourcing and distribution of manganese ore products and subsequently in processing ores into ferro-manganese intermediate products. The OM
Slide 3: Analyst Roadshow Presentation September 2008
For personal use only Analyst Roadshow Presentation September 2008 0
Slide 4: Disclaimer
Disclaimer For personal use only By viewing this presentation you agree to be bound by the following; This presentation has been prepared solely for information purposes and is subject to change without notice. The Directors of OM Holdings Ltd accept responsibility for the information contained in t
Slide 5: The Board and Management
For personal use only The Board and Management 2
Slide 6: OMH Board
OMH Board Executive For personal use only Exec Chairman N.T. Low 25+ years industry experience, founder of OMH (from 1 Oct 08) Group CEO 14+ years of industry experience, ex VP Manganese Marketing and Carbon Steel Peter Toth Materials Marketing Director of BHPB Group CFO B. C. Ong 20+ years of indus
Slide 7: OMH Management
OMH Management For personal use only OMH Board Company Secretary Executive Chairman NT Low Investor Relations Group CEO Peter Toth MD MD GM Head of HR Group CFO Marketing, Trading Group CDO OMM OMQ & Logistics and Administration Ong Beng Chong TBA Paul Thomas Yang Li Zhong Goh Ping Choon SK Heng 4
Slide 8: Vision and Strategy
For personal use only Vision and Strategy 5
Slide 9: A unique position and opportunity
A unique position and opportunity 1 2 For personal use only Favorable Strong demand industry and tight ore structure supply 6 3 Experienced Board and Capacity to grow Management organically 5 4 Earnings BD, Strategic Cash flow Alliance and M&A opportunities Dividends 6
Slide 10: Our Vision and Strategy
Our Vision and Strategy Strategic supplier of ores and metals to the steel industry For personal use only 2 year plan Leading independent integrated manganese producer 5 year plan Diversified bulk steelmaking raw materials producer Focused Execution Organic growth at OMM and OMQ resource, production
Slide 11: 2008 – 2010 Operational objectives
2008 – 2010 Operational objectives For personal use only Exploration +10M resource Renner & Helen Springs and other new tenements Rejects Plant +90-150ktpa Mining Continuous improvement projects +50-100ktpa capacity opportunity New Plant +750ktpa capacity Smelting Sinter Plant 300ktpa 2008 2009 2010
Slide 12: OMH Overview
For personal use only OMH Overview 9
Slide 13: OMH
OMH - H1 2008 For personal use only A$ million YTD Jun YTD Jun Variance 2008 2007 % Total Sales 285.2 128.3 122% Gross Profit 134.8 32.4 316% Other Income 2.9 0.6 383% Profit Before Tax 103.3 17.1 504% Profit After Tax 96.9 15.2 538% 10
Slide 14: OMH NPAT by segment
OMH - H1 2008 NPAT A$ YTD Jun YTD Jun Variance For personal use only million 2008 2007 % OMM 55.4 (7.2) 769% OMS 37.6 20.5 83% OMQ 12.9 4.6 180% OMH (9.0) (2.7) 233% Total 96.9 15.2 538% • EBIT margin & ROCE of 36.3% & 40.3% • Basic Earning Per Share increased to A$0.21 • Interim Dividend for the ye
Slide 15: OMH
OMH - H1 2008 Revenue Dividends For personal use only A$ Cents Per Share 350 7.0 300 6.0 A $ M illio n 250 5.0 200 4.0 3.0 June Half 150 100 2.0 1.0 Dec Half 50 0.0 0 2003 2004 2005 2006 2007 2008 2003 2004 2005 2006 2007 2008 Profit/(Loss) attributable to Basic earnings/(Loss) per shareholders shar
Slide 16: OMH
OMH - H1 2008 A$ million Revenue A$ million Gross Profit For personal use only 134.8 350 140 290.5 285.2 300 120 109.9 250 214.7 100 183.8 200 80 150 128.3 60 100 40 32.7 32.4 19.1 50 20 0 0 2005 2006 2007 2007 H1 2008 H1 2005 2006 2007 2007 H1 2008 H1 A$ million EBITDA A$ million Net Profit Attribu
Slide 17: OMH production and prices
OMH - H1 2008 kt Manganese Ore Production kt Manganese Alloy Production For personal use only 60 600 516.4 50 500 39 38 40 400 346.4 30 26 27 300 243.4 223.5 200 20 16 100 10 [-] 0 0 2005 2006 2007 2007 H1 2008 H1 2005 2006 2007 2007 H1 2008 H1 US$/t 600 Manganese Ore average sale price US$/t Mangan
Slide 18: OMH margins
OMH - H1 2008 For personal use only Strong margin improvement 700ktpa production level maintained since 4Q07 Operating cost control Manganese price increases captured in bottom line % % % Gross Margin EBITDA Margin Net Profit Margin 47.3 50 50 40 34.0 45 37.8 38.0 40 30 40 19.7 35 30 20 22.0 1
Slide 19: OMH cash flow and liquidity
OMH - H1 2008 For personal use only A$ million CF from Operating Activities Current Ratio and Quick Ratio 60 3 50.8 Current ratio 2.6 50 42.0 2.5 Quick ratio 40 2.0 2.0 30 2 1.5 1.6 20 1.5 10 5.1 4.1 1.1 1.1 1.0 0 1 -10 0.5 -20 -18.3 -30 0 2005 2006 2007 2007 H1 2008 H1 2005 2006 2007 2008 H1 Operat
Slide 20: OMM Overview
For personal use only OMM Overview 17
Slide 21: OMM
OMM - H1 2008 For personal use only A$ million YTD Jun YTD Jun Variance 2008 2007 % Total Sales 109.6 25.8 424% Gross Profit 52.9 (1.7) 3,103% Other Expenses 3.3 (5.5) 60% Profit Before Tax 56.2 (7.2) 781% Profit After Tax 55.4 (7.2) 769% 18
Slide 22: OMM Mining/Processing
OMM - H1 2008 Mining/Processing For personal use only Mining Bootu Creek Quarterly Mining Activity Mining volumes increased to + 8 mil 2,800 BCM’s / year 2,400 Mining Contract Renewal Dec 2008 2,000 k bcm’s Processing 1,600 1,200 Crushing/screening, 800 • ~2 mtpa ore fed at ~ 24% Mn 400 Dens
Slide 23: OMM Costs
OMM - H1 2008 Costs Mn Ore Cash Cost For personal use only 7 Cost structure 6 A$/dmtu 5 Fleet size (Mining Contract renewal Dec 08) 4 Overburden and pre-strip activities 3 accelerated in H108 2 3.30 3.03 3.29 4.47 1 Royalty costs driven by margins 0 2006 H2 2007 H1 2007 H2 2008 H1 Rapid expa
Slide 24: OMM Logistics
OMM - H1 2008 Logistics For personal use only Capacity to support growth Road kt Rail Haulage • 3rd road train mobilised 1,000 294 Rail 800 • Muckaty Rail Siding extension underway 600 138 • 4 weekly services enabling 19kt capacity 400 361 700 531 • Annual capacity raised to 994kt 200 218 • Addition
Slide 25: OMM – 2008 Exploration
OMM – 2008 Exploration For personal use only 2008 Exploration Program 2008 Exploration Targets within ML24031 45,000 m RC drilling to expand resources and reserves at Bootu Creek 1,500 m diamond drilling to test “Western Limb” ore existing reserves at depth 2008 exploration 2,500 RC drilling t
Slide 26: OMM – 2009 Exploration
OMM – 2009 Exploration A$20m Regional Exploration Programme in 2008 and 2009 2009 Exploration Program For personal use only Focus on Renner Springs and Helen Springs Areas Significant surface outcropping Limited historical exploration drilling to date Forecast Expenditure A$10 million Mil t’
Slide 27: OMM – Growth: Rejects Plant
OMM – Growth For personal use only Rejects Plant The Opportunity Rejects Project Incremental Benefit Kt Mn • Retreat Bootu Creek ROM Reject Material 1,000 • Existing Stockpile ~ 750kt’s @ 20% Mn 800 90 60 • ROM Reject ~ 330kt pa @ 20% Mn 600 400 850 Production Increase 700 200 • 150kt for first
Slide 28: OMM - Growth: Continuous Improvement Projects
OMM - Growth For personal use only Continuous Improvement Projects under investigation Kt Mn Continuous improvement opportunities Availability & Utilization Rates 1,000 100 35 57 Yield Optimisation 800 150 600 Change Product Grade 1,042 400 New Plant 700 200 Size and configuration contingent
Slide 29: OMQ Overview
For personal use only OMQ Overview 26
Slide 30: OMQ
OMQ - H1 2008 A$ million YTD Jun YTD Jun Variance % For personal use only 2008 2007 Production (mt) 27,276 16,086 70% Total Sales 58.7 16.4 258% Gross Profit 12.7 4.4 189% Profit Before Tax 12.5 4.6 172% Profit After Tax 12.5 4.6 172% 27
Slide 31: OMQ Qinzhou alloy smelter
OMQ - H1 2008 For personal use only Qinzhou alloy smelter (PRC) kt Ferro Alloy Production Investment: US$ 8.3 million 60 Capacity: 60ktpa Capacity: 60ktpa 40 Competitive advantages of ore source, cost, location, logistics and customers 20 39 38 41 26 Expansion options - Sinter Plant 0 2005A
Slide 32: OMS Overview
For personal use only OMS Overview 29
Slide 33: OMS
OMS - H1 2008 A$ million YTD Jun YTD Jun Variance % For personal use only 2008 2007 Sales – Mn, Cr 531.6 437.4 22% Ore & Alloy (mt) Total Sales 286.1 115.5 148% Gross Profit 65.7 15.5 324% Profit Before Tax 42.5 22.0 93% Profit After Tax 37.6 20.5 83% 30
Slide 34: OMS
OMS - H1 2008 For personal use only Singapore based marketing, trading and logistics group Buys all OMM and export OMQ product on FOB basis Sells all OMM product and all export OMQ product to Chinese alloy smelters and leading Asian steel mills on CIF basis Buys third party Mn ore, Mn alloy,
Slide 35: Market Overview
For personal use only Market Overview 32
Slide 36: The Market - demand
The Market - demand For personal use only Mil tonnes Crude Steel Production Mil tonnes Manganese Supply-Demand Balance 1,400 1,342 14,000 Demand 1,250 12,600 for 2007 1,200 1,132 11,862 11,615 13,000 1,068 489 China 12,000 10,803 423 (36.4%) 970 CAGR 02-07: 1,000 904 280 349 (33.8%) 10,000 (30.8%) 2
Slide 37: The Market - Prices
The Market - Prices For personal use only US$/dmtu Import Prices of Manganese Ore CIF China spot 18 16 14 12 10 8 6 4 2 0 Jan Mar May Jul Sept Nov Jan Mar 2007 2008 US$/tonne Price of Silico-manganese US$/tonne Price of HC US$/tonne Price of Refined 3,500 3,500 5,000 for US Import Ferromanganese for