Alpha Metallurgical Resources, Inc. · NYSE:AMR
Alpha Metallurgical Resources — Investor Presentation (August 2021)
34 slides from Alpha Metallurgical Resources's investor presentation, Aug 6, 2021
Slide 1: Form 8-K Alpha Metallurgical Resources, Inc.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 _______________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): August 6, 2021 ALPHA METALLURGICAL RESOURCES, INC. (Exact Name of Reg
Slide 2: Table of Contents
TABLE OF CONTENTS Item 7.01 Regulation FD Disclosure Item 9.01 Financial Statements and Exhibits Signatures Exhibit Index
Slide 3: Item 7.01 Regulation FD Disclosure
Item 7.01 Regulation FD Disclosure. On August 6, 2021, the Company made available a written presentation that management may use from time to time in connection with meetings with current and potential investors. A copy of the presentation is attached hereto as Exhibit 99.1. This Current Report on F
Slide 4: Signatures
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Alpha Metallurgical Resources, Inc. Date: August 6, 2021 By: /s/ C. Andrew Eidson Name: C. Andrew Eidson
Slide 5: Exhibit Index
EXHIBIT INDEX Exhibit No. Description Exhibit 99.1 Investor presentation 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
Slide 6: Investor Presentation
Investor Presentation August 2021
Slide 7: Forward Looking Statements
Forward Looking Statements This document includes forward-looking statements. These forward-looking statements are based on Alpha's expectations and beliefs concerning future events and involve risks and uncertainties that may cause actual results to differ materially from current expectations. Thes
Slide 8: Table of Contents
Table of Contents Vision, Execution & Leadership 4 Company Overview – Alpha Advantages 11 Operations Update – Significant Cost Improvements 17 Market Analysis – Macro Environment Trending Positive 21 Conclusion: Alpha Well-Positioned for the Future 25 Appendix 27 3
Slide 9: Vision, Execution & Leadership
Vision, Execution & Leadership
Slide 10: Alpha Investment Thesis
Alpha Investment Thesis Investment Highlights •1 Largest and Most Diverse Metallurgical Coal Producer in U.S. •2 Portfolio of Long-Lived Mines and Substantial Organic Reserve Growth Opportunities •3 Operational Excellence: Cost Reductions, Safety, Environmental •4 Advantaged Sales & Logistics Platfo
Slide 11: Accomplishments and Continued Success
Accomplishments and Continued Success Over the last several quarters, Alpha has executed on its stated goals and transformed the organization into a stronger company. These actions include the following accomplishments: Achieved internal safety and environmental performance goals across the company,
Slide 12: Pathway to a Pure Metallurgical Portfolio
Pathway to a Pure Metallurgical Portfolio Metallurgical Shipments Expected to Account for More than 90% of the Total Volume by 2023 Met 14% 18% 48% 55% 61% 81% 85% 93% Thermal 86% 82% 52% 45% 39% 19% 15% (1) Based on midpoint of guidance. 7% (2) Targeted goal. 2016 2017 2018 2019 2020 2021 (1) 2022
Slide 13: Cost-Efficient, Well-Managed and Robust Operating Portfolio
Cost-Efficient, Well-Managed and Robust Operating Portfolio Note: Production and reserves information as of 12/31/20. List of active mines as of 6/30/21. * Contractor mine ** Surface mine 8
Slide 14: Recently Completed Low-Cost Mine Development Projects
Recently Completed Low-Cost Mine Development Projects • Commenced production on multiple metallurgical coal projects with direct mining costs expected at or below $70 per ton: • Contributed to driving Met cost of coal sales down by ~$20 per ton in 2020 • Reserve bases with lives greater than 20 year
Slide 15: Experienced Leadership Team Streamlining Decision-Making
Experienced Leadership Team Streamlining Decision-Making 10
Slide 16: Company Overview – Alpha Advantages
Company Overview – Alpha Advantages
Slide 17: Alpha Snapshot
Alpha Snapshot (1) NYSE: AMR (1) Metrics as of 12/31/20 unless otherwise noted. (2) Alpha Natural Resources, Inc. founded in 2003. (3) As of 6/30/21. See slide 8 for list of mines and preparation plants. (4) See map on slide 16 for specific countries. (5) Since 2016. 12
Slide 18: Alpha Advantages – Well Positioned for Longevity
Alpha Advantages – Well Positioned for Longevity Met Reserve Life of Public U.S. Met Coal Producers 58 50 46 30 27 20 Peer 5 Peer 1 Alpha Peer 3 Peer 4 Peer 2 Implied Reserve Life (Years)(1) Recent Investment in Low-Cost Mines Enables Future Production to Remain Strong with Minimal Growth Capital In
Slide 19: Alpha Advantages – Most Diverse Domestic Met Producer
Alpha Advantages – Most Diverse Domestic Met Producer Largest Domestic Met Producer (1)(2) Well-Balanced Met Quality Mix (2) LV 13% HVA 39% MV 24% HVB 24% 12.2 In Millions of tons Diversified Export Revenue Mix (2) 7.9 6.8 5.6 Domestic 1.7 29% 0.6 (3) Alpha Peer 3 Peer 2 Peer 1 Peer 5 Peer 4 Export
Slide 20: Strong Safety and Environmental Performance Continued in 2020
Strong Safety and Environmental Performance Continued in 2020 Non-Fatal Days Lost (NFDL) Violations Per Inspection Day (VPID) 3.0 0.7 National 2.5 National 0.6 Average Average 0.61 2.0 0.5 2.23 0.4 1.5 0.3 0.56 1.0 2.07 2.18 0.53 0.2 0.5 0.1 0.0 0.0 2019 2020 2019 2020 - Maintained strong 99.9% comp
Slide 21: Alpha Advantages – Largest Domestic Met Producer & Exporter
Alpha Advantages – Largest Domestic Met Producer & Exporter DTA provides a platform for extensive worldwide exports Hampton Roads (Newport News, Virginia) 65% Owned by Alpha (35% by Arch) 22 million tons of capacity (14.3 million attributable) 1.7 million tons of ground storage (1.1 million
Slide 22: Operations Update – Significant Cost Improvements
Operations Update – Significant Cost Improvements
Slide 23: Improved Productivity and Cost Containment Yielding Significant Cost Savings
Improved Productivity and Cost Containment Yielding Significant Cost Savings Mine Optimization & Improved Mine Productivity(1) …Along with Reduced Headcount 14.0 4,000 25 1000 3,934 22 3,900 918k 900 13.0 20 tons/mine 3,800 Number of Active Met Mines Avg Annual Output (000’s) In millions of tons 800
Slide 24: Capex Approaches Maintenance Level in 2021
Capex Approaches Maintenance Level in 2021 Capital Expenditures $250.0 $200.0 $192.4 Capex for Black Eagle, Lynn Branch and Road Fork 52 $154.0 completed $150.0 In millions $100.0 $93.0 $81.9 $50.0 $0.0 2018A 2019A 2020A 2021E* *Midpoint of Guidance 19
Slide 25: SG&A Reductions are Further Indication of Increased Cost Focus
SG&A Reductions are Further Indication of Increased Cost Focus SG&A $70.0 $60.9 $60.0 $52.2 $50.0 $50.0 $44.6 In millions $40.0 $30.0 $20.0 $10.0 $0.0 (1) 2018A 2019A 2020A 2021E* *Midpoint of Guidance (1) Contura Energy standalone for Jan – Nov 2018; Combined company thereafter. Note: Excludes expe
Slide 26: Market Analysis – Macro Environment Trending Positive
Market Analysis – Macro Environment Trending Positive
Slide 27: Upward Trend in Met Demand Driving Improvement in Pricing
Upward Trend in Met Demand Driving Improvement in Pricing Metallurgical Coal Indices $250.00 $230.00 $210.00 $190.00 In metric tons $170.00 $150.00 $130.00 $110.00 $90.00 US High Vol A US High Vol B US Low Volatile Premium Low Vol HCC Sources: Bloomberg and Platts 22
Slide 28: Crude Steel Production Rebounds Solidly After April 2020 COVID-Related Shutdowns
Crude Steel Production Rebounds Solidly After April 2020 COVID- Related Shutdowns World Crude Steel Production (Monthly Production) 180,000.0 170,000.0 160,000.0 In metric tons 150,000.0 140,000.0 COVID- related shutdowns 130,000.0 in April 120,000.0 Source: World Steel Association 23
Slide 29: Solid Steel Demand Growth Expected in 2021 and Beyond
Solid Steel Demand Growth Expected in 2021 and Beyond Global Steel Demand Projected Crude Steel Production in India through 2050 1,850 1,925 380 360 1,874 +3% 1,800 340 320 300 +6% In 000s of metric tons In 000s of metric tons 280 1,750 260 1,767 1,772 240 220 1,700 200 180 160 1,650 140 120 100 80
Slide 30: Conclusion: Alpha Well-Positioned for the Future
Conclusion: Alpha Well-Positioned for the Future
Slide 31: Conclusion: Alpha Well-Positioned for the Future
Conclusion: Alpha Well-Positioned for the Future 1 Opportunities to build on the significant accomplishments of 2020, which include: • Lowered met production cost by ~$20 per ton • Lowered SG&A(1) by nearly $10 million to ~$52 million • Completed majority of capital investments for new, low-cost met
Slide 32: Appendix
LPHA METALLURGICAL RESOURCES Appendix
Slide 33: 2021 Guidance (as of August 6, 2021)
2021 Guidance (as of August 6, 2021) Shipments (million tons) Low High Metallurgical 13.0 14.0 Non-Metallurgical By-Product 1.3 1.8 Met Segment 14.3 15.8 All Other 1.3 1.7 Total Shipments 15.6 17.5 Committed / Priced Volumes(1)(2)(3) % Committed Average Price ($/ton) Metallurgical – Domestic $87.86
Slide 34: Cash-Related Outflows Expected to Materially Decrease After 2022
Cash-Related Outflows Expected to Materially Decrease After 2022 Cash Outlays (US$ millions) 2021 2022 2023 2024 Acquisition Related Obligations $8.1 $4.3 $ -- $ -- Contingent Revenue Obligations(1) 12.9 13.6 3.5 -- LCC Obligations(2) 13.1 4.8 2.5 -- Reorganization & Transaction-related Cash Outlays
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