Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — Shareholder Meeting (November 2020)
52 slides from Fortescue's shareholder meeting presentation, Nov 11, 2020
Slide 1: Presentation – Annual General Meeting 2020 (ASX cover letter)
For personal use only 11 November 2020 The Companies Officer Australian Securities Exchange Ltd Level 40, Central Park 152-158 St Georges Terrace Perth WA 6000 Dear Madam or Sir PRESENTATION – ANNUAL GENERAL MEETING 2020 Fortescue Metals Group Ltd (Fortescue) (ASX: FMG) advises that Chairman, Dr And
Slide 2: Fortescue Metals Group Ltd Annual General Meeting
For personal use only Fortescue Metals Group Ltd Annual General Meeting Wednesday, 11 November 2020 1
Slide 3: Important Notice and Forward Looking Statements Disclaimer
Forward 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 Looking For personal use only to Fortescue based on this presentation. This pres
Slide 4: Response to COVID-19
Response to Prioritise the health of our people, maintain jobs, COVID-19 sustain our business and protect communities For personal use only Temporary extension Additional bus and of operational roster air charter services as needed Temperature and Non-essential site and health testing and office-bas
Slide 5: Safety and unique culture
Safety and unique culture For personal use only 2.1 TRIFR At 30 September 2020 13% improvement From 30 June 2020 96% participation Safety Excellence and Culture Survey 4
Slide 6: Approach to Sustainability
Approach to Sustainability We are a global force, committed to empowering thriving communities For personal use only Setting Safeguarding the Creating positive high standards environment social change Employee health and safety Climate change action and Creating employment and disclosure busin
Slide 7: Diversity is integral to our success
Diversity is integral to Research shows diverse leadership teams result in increased likelihood our success For personal use only of better company performance1 14% Aboriginal Employment across Pilbara operations 19% female Employment rate 44% female Representation on Board of Directors 1Source: Cur
Slide 8: Protecting Aboriginal heritage
Protecting Aboriginal Detailed processes for engagement and heritage management heritage For personal use only Seven agreements with Native Title Groups Heritage avoidance Primary objective ~6,000 heritage sites Protected and avoided 2.7 million ha of land Ethnographically surveyed 7
Slide 9: Creating positive social change
Creating positive Empowering Aboriginal people through training, employment and social change For personal use only business development opportunities 900 jobs to Aboriginal people via VTEC since 2006 Billion Opportunities A$2.7 billion in contracts to Aboriginal businesses and joint ventures since
Slide 10: Emissions reduction targets
Emissions Addressing the global climate change challenge with a sense reduction targets For personal use only of urgency Net zero Operational emissions by 2040 26% reduction Scope 1 and Scope 2 emissions from 2020 levels, by 2030 Decarbonisation pathway Energy infrastructure to increase use of renew
Slide 11: Energy infrastructure
Energy infrastructure Industry leading emissions reduction goal, to achieve net zero operational For personal use only emissions by 2040, underpinned by practical initiatives Chichester solar gas Pilbara Energy Connect Hydrogen hybrid project US$100 million investment by US$250 million Pilbara
Slide 12: FY20 highlights
Excellent operational performance drove record financial results FY20 highlights For personal use only 2.4 TRIFR 178.2 mt shipped 14% improvement 6% on FY19 US $12.94 /wmt US $79 /dmt C1 cost includes US$0.22/wmt Average realised price COVID-19 impact 21% on FY19 US $8.4bn US $4.7bn Underlying EBITD
Slide 13: Q1 FY21 highlights
Strong start to FY21 with record first Q1 FY21 quarter operating performance highlights For personal use only 2.1 TRIFR 44.3 mt shipped 13% improvement 5% higher than Q1FY20 US $12.74 /wmt US $106 /dmt C1 cost Average realised price 89% of average Platts 62% CFR Index US $1.0bn >10 mt sold Net cash
Slide 14: Strong demand for iron ore in China supported by increased imports
Strong demand for iron ore in China supported by increased imports For personal use only Sustained growth in China’s crude steel production China monthly crude steel output (mt) China monthly iron ore imports (mt) 100 120 95 110 90 100 85 80 90 75 80 70 65 70 60 60 55 50 50 Jan Feb Mar Apr May Jun J
Slide 15: Investing in growth
Investing in growth Executing on growth, product and decarbonisation strategy For personal use only Eliwana US$1.325 – US$1.375 billion investment 30mtpa processing and 143km rail Iron Bridge US$2.6 billion investment 22mtpa 67% Fe magnetite concentrate product Pilbara Energy Connect US$700 million
Slide 16: Delivering dividends
Fully franked dividend of A$1.76 per share, Delivering representing a 77% payout of FY20 NPAT dividends For personal use only Dividends declared (A$/share) and payout ratio (%) 78% 77% 2.00 80% 1.76 62% 1.50 60% 52% 1.14 38% 36% 1.00 40% 21% 21% 0.50 17% 16% 0.45 20% 0.20 0.23 0.15 0.07 0.08 0.10 0.
Slide 17: Our Purpose and Values
For personal use only Our Purpose Thriving communities | Global force Fortescue’s Values
Slide 18: Dr Andrew Forrest AO, Founder and Chairman
For personal use only Dr Andrew Forrest AO Founder and Chairman 1
Slide 19: Our performance based culture
For personal use only Our performance based culture 2
Slide 20: Our assets and infrastructure
For personal use only Our assets and infrastructure 3
Slide 21: Our Board and leadership team
For personal use only Our Board and leadership team 4
Slide 22: For personal use only
For personal use only 55
Slide 23: Thrive by Five
For personal use only Thrive by Five 6
Slide 24: Fire and Flood Resilience
For personal use only Fire and Flood Resilience 7
Slide 25: Protecting Australia from COVID-19
For personal use only Protecting Australia from COVID-19 8
Slide 26: For personal use only
os Fortescue Daw lifelong inequality shapes women S- girls’ experience of modern slavery / <= ‘ a —_ ; = . & a 3 % Ee oe a * a WE CS - > oe “ ug ™ - 9 .——
Slide 27: For personal use only
For personal use only 10 10
Slide 28: New frontiers
For personal use only New frontiers 11
Slide 29: Chairman quote on renewable energy resources
“After scientific and personal analysis of the renewable energy resources of our For personal use only little planet, I can assure you that there is more than enough renewable energy to sustainably and economically supply every person on this planet, from this time forth. It is our job to respectful
Slide 30: Renewable Energy/Green Industry revolution begins at home
For personal use only Renewable Energy/Green Industry revolution begins at home – at Fortescue 13
Slide 31: We start with renewable energy to power our fixed plant
For personal use only We start with renewable energy to power our fixed plant 14
Slide 32: ...then to our trucks, rail and ships
For personal use only …then to our trucks, rail and ships 15
Slide 33: Every step reduces carbon emissions and operating costs
For personal use only Every step reduces carbon emissions and operating costs 16
Slide 34: Pilbara energy project
Pilbara energy project For personal use only 17
Slide 35: Why? Large scale production of energy
Why? Large scale production of energy For personal use only Relative installed capacity1 (GW) Chevron Total FFI Target 0 100 200 300 1 Comparatives based on 2019 mmboe production converted to installed GW on an energy equivalent basis 18
Slide 36: Green H2/Ammonia is critical to reduce emissions
Green H2/Ammonia is critical to reduce emissions in the world’s major emitting industries For personal use only × Transport/shipping Adopt H2/Ammonia fuel cells × Ammonia/fertiliser Produce ammonia from green hydrogen × Steel making/coal Switch to green hydrogen fuelled process × Industrial he
Slide 37: Fortescue and the coming stampede into Renewable Energy/Green Industry
For personal use only Fortescue and the coming stampede into Renewable Energy/Green Industry 20
Slide 38: Our Origin: Fortescue Metals Group flywheel
Our Origin: Fortescue Metals Group flywheel For personal use only Secure strategic Peg the Pilbara port & rail access Develop iron ore mines Develop low cost Increase Fortescue rail and port production and capacity growth cashflow Lower operating costs and debt 21
Slide 39: We are a global leader
We are a global leader For personal use only Thriving Communities │Global Force • Strongest balance sheet in the global resources sector • Leading cost position in the world’s most competitive industry • Entire supply chain financed, built and operated – from source to market • Planning to repeat th
Slide 40: Our track record
Our track record For personal use only Thriving Communities │Global Force • Number one ranking stock in the S&P/ASX 100 Index for total shareholder returns over the three years to 30 June 2020 • Most efficient rail, port and shipping infrastructure in Australia • World’s fastest, heaviest bulk railw
Slide 41: A technology company with deep industry experience
A technology company with deep industry experience For personal use only Thriving Communities │Global Force • Intensely technology based with one of the largest mining automation operations globally • Successfully raised and repaid US$33bn1 corporate debt • ~A$1bn investment in decarbonisation and h
Slide 42: Fortescue is building a major Renewable Energy/Green Industry business
For personal use only Fortescue is building a major Renewable Energy/Green Industry business with global scale 25
Slide 43: Fortescue Future Industries (FFI) flywheel
Fortescue Future Industries (FFI) flywheel For personal use only Secure best Optimise gH2 Develop first renewable assets carrier technology 100 GW Expand renewable Develop and irongH2 capacity ore mines Drive increased FFI gH2 Reduce gH2 gH2 demand growth energy costs Increase gH2 free cash flow 26
Slide 44: We are now rapidly expanding globally
We are now rapidly expanding globally For personal use only Entire system delivered and operated by Fortescue Future Industries Renewable energy Green Industry Ship green products target • Fuels to markets 235 GW • Fertilizers • Metals 27
Slide 45: Our thriving communities
Our thriving communities For personal use only Thriving Communities │Global Force • Has now engaged with 25 governments to develop potential projects • Local workforce engagement across all projects ensuring communities thrive • We only work with governments who do not tolerate Modern Slavery1 – Zer
Slide 46: What we say to governments
What we say to governments For personal use only Thriving Communities │Global Force • We are a major Australian infrastructure developer and operator that insists on human rights and equal opportunities • We are a Renewable Energy/Green Industry developer, financier and operator • We are here to est
Slide 47: Our global fair process
Our global fair process For personal use only Thriving Communities │Global Force • Partnering with countries to unlock Renewable Energy/Green Industry potential • 47 countries closely studied for ̶ government interest and capability ̶ renewable energy sources • Shortlisting countries to work with •
Slide 48: We are leading the IP race
We are leading the IP race For personal use only Thriving Communities │Global Force Electrolysis • Hydropower and Geothermal plant design • Energy storage chemistry Ammonia production • Ammonia cracking and production • Synthetic fertiliser production Green • Hydrogen electrolysis membranes metals •
Slide 49: Renewable energy must be cheaper than fossil fuel
Renewable Thriving Communities │Global Force energy must For personal use only be cheaper • FFI has a portfolio of potential renewable energy assets, which are efficient, low cost than fossil fuel and non-replicable • Scale and innovation in gH2 production will deliver lowest cost per unit of energy
Slide 50: Transforming Fortescue
Transforming Fortescue For personal use only From To Cashflow and Cashflow and Growth Super Growth Resources Renewables and Resources 33
Slide 51: Fortescue, for the future
For personal use only Fortescue, for the future 34
Slide 52: Fortescue www.fmgl.com.au
ait Fortescue w Fortescue iy www.fmgl.com.au a ( oe 1 YW FortescueNews ' ie _A 7 ec lal
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