Warrior Met Coal, Inc. · NYSE:HCC

Warrior Met Coal — Investor Presentation (February 2020)

27 slides from Warrior Met Coal's investor presentation, Feb 19, 2020

  1. Slide 1: Blue Creek: Transformational Strategic Investment with Unparalleled Return Profile

    Blue Creek Transformational Strategic Investment with Unparalleled Return Profile February 2020

  2. Slide 2: Forward Looking Statements

    Forward Looking Statements Main accents 0 0 121 255 55 96 0 229 100 156 0 229 These slides contain, and the Company’s officers and representatives may from time to time make, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the

  3. Slide 3: Blue Creek Provides High-Return Growth Opportunity via World-Class Asset

    Blue Creek Provides High-Return Growth Opportunity via World-Class Asset¹ Main accents 0 0 121 255 55 96 0 229 100 156 0 229 238 236 244 242 241 242 1 One of the Last Remaining Large-Scale (4.3 Mst p.a.), Untapped Premium HVA Mines in the U.S. 234 249 241  HEADING TXT HEADING UNDERLINE 2 Increases

  4. Slide 4: Warrior Has a Proven Track Record and the Financial Strength to Develop Blue Creek

    Warrior Has a Proven Track Record and the Financial Strength to Develop Blue Creek Main accents 0 0 121 255 55 96 0 229 100 156 0 229 Significant Value Creation for Stockholders… 238 236 244 242 241 242 Warrior Has Delivered Since 2016 234 249 241 Total Shareholder Return⁴ 240% Production Growth HEA

  5. Slide 5: Project

    Blue Creek Project

  6. Slide 6: What Makes Blue Creek a World-Class Project

    Blue Creek is a World-Class Project Main accents 0 0 121 255 55 96 0 229 100 156 0 229 Blue Creek Benefits from Existing 238 236 244 What Makes Blue Creek World-Class? 242 241 242 Infrastructure and Logistics Advantage 234 249 241 ~300 miles from HEADING TXT 4.3 Mst p.a. Production Capacity1 Port of

  7. Slide 7: Blue Creek is a Transformational Strategic Investment For Warrior

    Blue Creek is a Transformational Strategic Investment For Warrior¹… Main accents 0 0 121 255 55 96 0 229 100 156 0 229 238 236 244 242 241 242 234 249 241 NPV² IRR² Payback⁴ HEADING TXT HEADING UNDERLINE $ 1,039M ~30 % 2.3 Years 2ed accent 91 113 255 10% real discount rate, after tax Real, after tax

  8. Slide 8: Robust Financial Profile Across a Wide Range of Assumed HCC Prices

    …with Robust Financial Profile Across a Wide Range of Assumed HCC Prices Main accents 0 0 121 255 55 96 0 229 100 156 0 229 238 236 244 HVA Benchmark 242 241 242 Projected Payback¹ IRR² NPV ($M)³ Adj. EBITDA Margin⁴ 234 249 241 Price HEADING TXT HEADING UNDERLINE $ 180 / mt 1.8 Years 36 % $ 1,533 62

  9. Slide 9: Drives Warrior's Cash Costs to 1st Quartile Globally

    Blue Creek Drives Warrior’s Cash Costs to 1st Quartile Globally… Main accents 0 0 121 255 55 96 0 229 100 156 0 229 238 236 244 st nd rd th 242 241 242 1 Quartile 2 Quartile 3 Quartile 4 Quartile 234 249 241 180 HEADING TXT 160 HEADING UNDERLINE Warrior Warrior $113/st Pro Forma² 140 Current¹ Weight

  10. Slide 10: Enhances its Ability to Serve Customers

    … and Enhances its Ability to Serve Customers Main accents 0 0 121 255 55 96 0 229 100 156 0 229 238 236 244 242 241 242 Allows Customers to Load 3 Premium Coal Qualities, at Single Port, from Single Supplier and from a Single Coal Seam 234 249 241 Port Expansion Further Increases Attractiveness to

  11. Slide 11: Blue Creek's HVA Product is a Premium Coal with Superior Coking Characteristics

    Platts AUS Premium Low Vol Index: Penalties & Premia Within Net Value Min-Max ($/mt) Per 1% CSR 60 - 71% $0.90/ mt Blue Creek’s HVA Product is a Premium Coal with Per 1% VM 18 - 27% $0.90/ mt Superior Coking Characteristics Main accents 0 0 121 255 55 96 0 229 100 156 0 229 238 236 244  HVA provide

  12. Slide 12: Seaborne Metallurgical Coal Market

    Seaborne Metallurgical Coal Market

  13. Slide 13: High Vol A Represents Attractive Market for Warrior

    High Vol A Represents Attractive Market for Warrior Main accents 0 0 121 255 55 96 0 229 100 156 0 229 238 236 244 HVA from U.S. Mines Are Facing Reserve Depletion Limited Pipeline of HVA Projects 242 241 242 234 249 241 Significant Mine Closures in CAPP and NAPP Result in Declining Production Blue

  14. Slide 14: Attractive Long-Term Supply-Demand Fundamentals for Hard Coking Coal

    Attractive Long-Term Supply-Demand Fundamentals for Hard Coking Coal Main accents 0 0 121 255 55 96 0 229 100 156 0 229 238 236 244 242 241 242 Blue Creek Commissioning Coincides with an Increase in Projects Needed as a Result of Strong Demand Growth and Depleting Supply 234 249 241 HEADING TXT Stro

  15. Slide 15: High Vol A Pricing Dynamics Further Enhance Attractiveness to Warrior

    High Vol A Pricing Dynamics Further Enhance Attractiveness to Warrior Main accents 0 0 121 255 55 96 0 229 100 156 0 229 238 236 244 242 241 242 Declining Production Profile of HVA Has Improved Relative Pricing vs. Low Vol Coals 234 249 241 HEADING TXT U.S. High Vol A Price Premium / (Discount) $300

  16. Slide 16: Financing Strategy & Capital Allocation

    Financing Strategy & Capital Allocation

  17. Slide 17: Blue Creek Meets Warrior's Strict Investment Criteria

    Blue Creek Meets Warrior’s Strict Investment Criteria¹ Main accents 0 0 121 255 55 96 0 229 100 156 0 229 238 236 244 242 241 242 234 249 241 Maximize Stockholder World Class Asset Attractive Financial Returns HEADING TXT    Returns HEADING UNDERLINE 2ed accent . Large-scale, 1st quartile cost, .

  18. Slide 18: Blue Creek to Enhance Warrior's Profitability and Cash Flow Generation

    Blue Creek to Enhance Warrior’s Profitability and Cash Flow Generation¹ Main accents 0 0 121 255 55 96 0 229 100 156 0 229 238 236 244 Illustrative Impact to Adj. EBITDA and Adj. EBITDA Margin² Illustrative Impact to Free Cash Flow (FCF)³ 242 241 242 234 249 241 % HEADING TXT 38% 56% 43% Margin HEAD

  19. Slide 19: Warrior Remains Profitable Through-the-Cycle

    Blue Creek Remains Profitable Through-the-Cycle¹ Main accents 0 0 121 255 55 96 0 229 100 156 0 229 238 236 244 Adj. EBITDA and Adj. EBITDA Margin² Free Cash Flow (FCF)³ 242 241 242 234 249 241 % 38% 48% 54% 56% 59% 62% HEADING TXT Margin $ 402 HEADING UNDERLINE $ 479 2ed accent $ 337 91 113 255 181

  20. Slide 20: Warrior has Significant Flexibility in How it Funds Blue Creek

    Warrior has Significant Flexibility in How it Funds Blue Creek… Main accents 0 0 121 255 55 96 0 229 100 156 0 229 238 236 244 242 241 242 234 249 241  Warrior has a cash balance of $193M Current Cash and total liquidity of $310M HEADING TXT Balance — Warrior’s minimum liquidity ($193M) HEADING UND

  21. Slide 21: Capex Spend Profile Allows it to be Opportunistic

    … and Capex Spend Profile Allows it to be Opportunistic Main accents 0 0 121 255 55 96 0 229 100 156 0 229 2020 2021 2022 2023 2024 2025 Major Project Stages and Milestones Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 238 236 244 242 241 242 Engineering 234 249 241 Permitt

  22. Slide 22: Warrior Remains Committed to Returning Excess Cash Flows to Stockholders

    Warrior Remains Committed to Returning Excess Cash Flows to Stockholders Main accents 0 0 121 255 55 96 0 229 100 156 0 229 238 236 244 Historical Special Dividends Occurred When HCC >$193/mt 242 241 242 234 249 241 Avg. LTM  Warrior will maintain $0.05/share quarterly HEADING TXT HCC Price $204 $1

  23. Slide 23: Key Takeaways: Blue Creek Provides High-Return Growth Opportunity

    Blue Creek Provides High-Return Growth Opportunity via World-Class Asset¹ Main accents 0 0 121 255 55 96 0 229 100 156 0 229 Key Takeaways 238 236 244 242 241 242 234 249 241 1 One of the Last Remaining Large-Scale (4.3 Mst p.a.), Untapped Premium HVA Mines in the U.S.  HEADING TXT HEADING UNDERLIN

  24. Slide 24: Appendix

    Appendix

  25. Slide 25: Reconciliation of Adjusted EBITDA to Amounts Reported Under U.S. GAAP

    Appendix Main accents Non-GAAP Financial Measures 0 0 121 255 55 96 0 229 100 156 229 0 Reconciliation of Adjusted EBITDA to Amounts Reported Under U.S. GAAP 238 236 244 242 241 242 234 249 241 2019A (in thousands) $178/mt HEADING TXT Net income $ 301,699 HEADING UNDERLINE Interest expense, net 29,3

  26. Slide 26: Reconciliation of Free Cash Flow to Amounts Reported Under U.S. GAAP

    Appendix Main accents Non-GAAP Financial Measures 0 0 121 255 55 96 0 229 100 156 229 0 Reconciliation of Free Cash Flow to Amounts Reported Under U.S. GAAP 238 236 244 242 241 242 234 249 241 2019A (in thousands) $178/mt HEADING TXT Net cash provided by operating activities $ 532,814 HEADING UNDERL

  27. Slide 27: HEADING TXT HEADING UNDERLINE 2ed accent 91 113 255 181 201 245 255 255

    Main accents 0 0 121 255 55 96 0 229 100 156 0 229 238 236 244 242 241 242 234 249 241 HEADING TXT HEADING UNDERLINE 2ed accent 91 113 255 181 201 245 255 255 245 1ed accent 252 251 253 252 252 252 251 254 252 Source: Company information 27

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