Peabody Energy Corporation · NYSE:BTU
Peabody Energy — B. Riley Securities Institutional Investor Conference 2024
41 slides from Peabody Energy's conference presentation, May 22, 2024
Slide 1: Building Brighter Futures
B U I L D I N G B R I G H T E R F U T U R E S May 22-23, 2024 B. Riley Securities Institutional Investor Conference
Slide 2: Disclosure Regarding Forward-Looking Statements
2 Disclosure Regarding Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or var
Slide 3: Peabody – The Investment Thesis
3 Peabody – The Investment Thesis • Proven commitment to creating value for our shareholders through our capital return program - Returned $471 million to shareholders through share repurchases and dividends • Unique diversified portfolio offers unmatched product, customer and market optionality - 2
Slide 4: Peabody Quick Facts
4 Peabody Quick Facts1 1 All statistics are for the year ended December 31, 2023. 2 Total Recordable Incident Frequency Rate (‘TRIFR’) equals recordable incidents per 200,000 hours worked; MSHA reported total U.S. TRIFR for 2023 of 2.72. 3 Adjusted EBITDA is a non-GAAP financial measure. Refer to th
Slide 5: Peabody Serves Broad Global Customer Base
5 Note: The company attributes revenue to individual regions based on the location of the physical delivery of the coal. Revenue breakdown for FY 2023. Peabody Serves Broad Global Customer Base 0% 20% 40% India France Indonesia Vietnam Brazil Other Taiwan Australia China Japan U.S. Revenue from Cust
Slide 6: Portfolio Diversity and Financial Strength
6 Portfolio Diversity and Financial Strength Note: Adjusted EBITDA is a non-GAAP financial measure. Refer to the definitions and reconciliations to the nearest GAAP measure in the appendix. (1) Includes share repurchases of $80 million and dividends paid of $10 million during Q1 2024. FY 2023 Adjust
Slide 7: Financial Strategy
7 Financial Strategy • Generated $693 million and $1.1 billion of Free Cash Flow(1) in 2023 and 2022 • Repaid all senior secured debt • Fully funded global reclamation accounts • Over $1.0 billion of available liquidity • Returned $471 million to shareholders based on 2023 Available Free Cash Flow •
Slide 8: Peabody Undervalued Relative to Peers
8 Peabody Undervalued Relative to Peers Source: Latest public company filings, IBES consensus estimates and FactSet market data as of 31-Mar-2024 | Note: Debt calculations for Enterprise Value (EV) include unaffected asset retirement obligations and accrued pensions and other post-retirement benefit
Slide 9: Centurion Mine Complex: Unique Growth Project
9 Centurion Mine Complex: Unique Growth Project
Slide 10: Centurion Mine Complex: Organic Growth
10 Centurion Mine Complex: Organic Growth Tier one premium hard coking coal mine complex utilizing $1.0+ billion of existing infrastructure and equipment Mine life potential of 25+ years through 130Mt integrated mine plan with the acquisition of the Wards Well coal deposit Premium grade hard coking
Slide 11: Centurion Mine Complex: World-Class Infrastructure in Place
11 Centurion Mine Complex: World-Class Infrastructure in Place • Brownfield redevelopment benefits from significant infrastructure with replacement cost estimated at more than $1 billion • Infrastructure includes: Coal Handling Prep Plant (CHPP) with successful history Dedicated accommodation villag
Slide 12: Centurion Mine Complex: A Premier, Tier One Premium Hard Coking Coal Mine
12 Centurion Mine Complex: A Premier, Tier One Premium Hard Coking Coal Mine Current Development Area • Targeting first development coal in second quarter 2024 and longwall production in 2026 • Goonyella Middle Seam expected to support five years of longwall production from 20 million tons of reserv
Slide 13: Centurion: Project Summary – Current Development Area
13 0.1 0.4 3.7 3.5 4.5 4.4 3.4 2024 2025 2026 2027 2028 2029 2030 Centurion: Project Summary – Current Development Area Projections Description Mine Goonyella Middle (“GM”) Seam Through Existing Mine Workings (excludes Wards Well) Reserves GM Seam: 20 million tons Product Low Vol Premium Hard Coking
Slide 14: Centurion Mine Complex: 2024 Goals
14 Centurion Mine Complex: 2024 Goals Current Development Area ✓ Commission development equipment to commence construction of underground roadways ✓ Continue to onboard operators and maintenance personnel to support underground development and preparation for longwall mining ✓ Complete refurbishment
Slide 15: Centurion: The World's Best Coking Coal
15 Centurion: “The World’s Best Coking Coal” Centurion Quality is Perfect Balance of High Coal Reactivity and Coke Strength ✓Very high coke strength - +68 CSR means highly productive coke ✓Very low ash for premium coking coal - Less than 10% ash, increasingly rare ✓Low sulphur - Supports steel mills
Slide 16: Market Overview
Market Overview Peabody
Slide 17: Supply Side Response Limited Due to High Barriers to Entry
17 Supply Side Response Limited Due to High Barriers to Entry Coal Supply Development Constraints Reduced Capital Investment NGO Activity Political Environment Increased Permit Scrutiny Labor Shortage Increased Regulation
Slide 18: Seaborne Market Dynamics
18 Seaborne Market Dynamics • Fundamental demand profile and supply constraints favor prices staying higher than historical levels • Supply response challenged by lack of capital investment, ever-increasing barriers to entry, and resource depletion • Seaborne thermal coal pricing has reverted toward
Slide 19: Seaborne Met Coal Demand Growing – Supply Response Constrained
19 Seaborne Met Coal Demand Growing – Supply Response Constrained – Organic Centurion Development • China’s rapid urbanization drove met coal consumption growth the last 15 years; India is projected to drive the next ~25 years and was the growth story of 2023 • Australia projected to continue to dom
Slide 20: Seaborne Thermal Coal Demand – New Supply Required
20 Seaborne Thermal Coal Demand – New Supply Required • Demand is projected to exceed installed and probable supply through the 2030s • Operating resources are in decline and could fall well short of forecast demand • China’s growth in ’23 suggests potential for China’s seaborne demand to exceed for
Slide 21: U.S. Thermal – Consistent Segment Free Cash Flow
21 U.S. Thermal – Consistent Segment Free Cash Flow • Peabody is the largest producer in the PRB and is committed to serve customers’ long-term needs • Peabody has a unique ability to supply low-cost products out of the PRB • Peabody’s ILB mines have the ability to meet customer requests as they cha
Slide 22: U.S. Electricity Generation Mix Remains Very Reliant on Coal
22 MISO SPP ERCOT PJM U.S. Electricity Generation Mix Remains Very Reliant on Coal Generation Source: Graph based on EIA, S&P Capital IQ, ISOs and Peabody analysis (1/01/2023 – 2/12/2024). Each dataset is represented by a boxed area where the central line signifies the median (P50) value, the bottom
Slide 23: Proposed EPA Regulations
23 Proposed EPA Regulations • In April, the EPA released its Clean Power Plan 2.0 which will accelerate the retirement of well- functioning coal plants necessary for baseload power across the country • Taking into account announced coal retirements, more than 100,000 MW of coal-fired generation are
Slide 24: Operations Overview
Operations Overview Peabody BUILDING BRIGHTER FUTURES 24
Slide 25: Seaborne Met Segment Operations Overview
25 Seaborne Met Segment Operations Overview Strategic Advantage: Multiple locations and products, positioned to serve Asia Pacific and Atlantic market Metropolitan Mine Production: 2.2 million tons Reserves: 10 million tons Type: Underground - Longwall Product: Semi-hard (65%), PCI (25%), Thermal (1
Slide 26: Seaborne Thermal Segment Operations Overview
26 Seaborne Thermal Segment Operations Overview Strategic Advantage: High margin operations positioned to serve Asia Pacific market Wilpinjong Mine Production: 12.0 million tons (export and domestic) Reserves: 57 million tons Type: Surface - Dozer/Cast, Truck/Shovel Product: Export (5,000-6,000 kcal
Slide 27: PRB Segment Operations Overview
27 North Antelope Rochelle Mine (NARM) Production: 62.0 million tons Reserves: 1,364 million tons Type: Surface - Dragline, Dozer/Cast, Truck/Shovel Product: Sub-Bit Thermal (~8,800 BTU/lb, <0.50 lbs SO2) Rail: BNSF and UP Location: Wyoming PRB Segment Operations Overview Strategic Advantage: Low-co
Slide 28: Other U.S. Thermal Segment Operations Overview
28 Other U.S. Thermal Segment Operations Overview Strategic Advantage: Located to serve regional customers in high coal utilization regions Bear Run Mine Production: 5.5 million tons Reserves: 72 million tons Type: Surface - Dragline, Dozer/Cast, Truck/Shovel Product: Thermal ~11,000 Btu/lb, 4.5 lbs
Slide 29: Other U.S. Thermal Segment Operations Overview (continued)
29 Other U.S. Thermal Segment Operations Overview (continued) with competitive cost operations and ample reserves / resources Gateway North Mine Production: 2.5 million tons Reserves: 26 million tons Type: Underground – Continuous Miner Product: Thermal ~11,000 Btu/lb, 5.4 lbs. SO2 Rail: UP Location
Slide 30: Sustainability
Sustainability Peabody
Slide 31: Sustainability Objectives
31 Sustainability Objectives • Responsible coal mining, reducing impact from operations and making best use of natural resources while creating economic value • Targets for greenhouse gas reduction and land reclamation • Collaborating with stakeholders on a pipeline of projects aimed at reducing emi
Slide 32: Opportunity to Create Additional Value with Our Existing Assets
32 Opportunity to Create Additional Value with Our Existing Assets Peabody Development • Land: 175,000+ surface acres owned in U.S. - Opportunity: develop solar energy and storage projects such as R3 Renewables - Potential for carbon capture and underground storage • Water: 38 million gallons manage
Slide 33: Technology and Collaboration
33 Technology and Collaboration • We support research and key initiatives in low emissions projects and partnerships such as: - Low Emission Technology Australia (LETA) - Carbon Utilization Research Council (CURC) • University of Wyoming School of Energy Resources - Peabody Advanced Coal Technology
Slide 34: Appendix Materials
Appendix Materials Peabody
Slide 35: 2024 Guidance Table
35 2024 Guidance Table Certain forward-looking measures and metrics presented are non-GAAP financial and operating/statistical measures. Due to the volatility and variability of certain items needed to reconcile these measures to their nearest GAAP measure, no reconciliation can be provided without
Slide 36: Peabody's Business Segments
36 Peabody’s Business Segments Mines Full Year 2023 Seaborne Thermal • Wilpinjong • Wambo Underground • Wambo OC JV • Tons Sold (millions) • Revenue per Ton • Costs per Ton • Adjusted EBITDA Margin per Ton • Adjusted EBITDA (millions) 15.5 $85.94 $48.66 $37.28 $576.8 Seaborne Metallurgical • Shoal C
Slide 37: Reconciliation of Non-GAAP Measures
37 Reconciliation of Non-GAAP Measures Note: Refer to definitions and footnotes on slide 41. Year Ended Year Ended Year Ended Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 Tons Sold (In Mill ions) Seaborne Thermal 15.5 Seaborne Metallurgical 6.9 Powder River Basin 87.2 Other U.S. Thermal 16.2 Total U.S.
Slide 38: Reconciliation of Non-GAAP Measures
38 Reconciliation of Non-GAAP Measures Note: Refer to definitions and footnotes on slide 41.
Slide 39: Reconciliation of Non-GAAP Measures
39 Reconciliation of Non-GAAP Measures Note: Refer to definitions and footnotes on slide 41. Year Ended Year Ended Year Ended Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 Segment Free Cash Flow (In Mill ions) (6) Seaborne Thermal Adjusted EBITDA 353.1$ 647.6$ 576.8$ Less: Segment additions to property,
Slide 40: Reconciliation of Non-GAAP Measures
40 Reconciliation of Non-GAAP Measures Note: Refer to definitions and footnotes on slide 41. Year Ended Year Ended Year Ended Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 Adjusted Capital Expenditures (In Mill ions) (7) Seaborne Thermal Segment additions to property, plant, equipment and mine developme
Slide 41: Reconciliation of Non-GAAP Measures: Definitions
41 Reconciliation of Non-GAAP Measures: Definitions (1) (2) (3) (4) (5) (6) (7) Note: Management believes that non-GAAP performance measures are used by investors to measure our operating performance. These measures are not intended to serve as alternatives to U.S. GAAP measures of performance and m
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