Yancoal Australia Ltd. · ASX:YAL
Yancoal Australia — FY2020 Earnings Presentation
20 slides from Yancoal Australia's earnings presentation, Feb 27, 2021
Slide 1: 2020 Full-year Financial Result Presentation
YANCOAL AUSTRALIA LTD ADDRESS: Level 18, Tower 2, 201 Sussex Street, Sydney NSW 2000 PHONE: 61 2 8583 5300 FAX: 61 2 8583 5399 WEBSITE: www.yancoal.com.au 26 February 2021 ASX Release: 2020 Full-year Financial Result Presentation Authorised for lodgement by the Yancoal Disclosure Committee Investor
Slide 2: Yancoal Australia Ltd 2020 Full-year Financial Result
Yancoal Australia Ltd 2020 Full-year Financial Result 26 1 February 2021
Slide 3: Important Notice and Disclaimer
Important Notice and Disclaimer Acceptance - This presentation is issued by Yancoal Australia Limited ABN 82 111 859 119 (“Yancoal”). By accepting, accessing or reviewing this presentation, you acknowledge and agree to the terms set out in this Important Notice and Disclaimer. Summary of information
Slide 4: Important Notice and Disclaimer (Continued)
Important Notice and Disclaimer (Continued) Reserves and Resources Reporting - In this presentation, references to mineral resources (“Resources”) and ore reserves (“Reserves”) for Yancoal are compliant with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserv
Slide 5: Robust performance through cyclical lows and COVID-19
Robust performance through cyclical lows and COVID-19 Effective COVID-19 response and Sustained safety performance $3.47 billion Revenue 7.4 TRIFR 38.3Mt Attributable Saleable $748 million Operating EBITDA Production & operating margin of 21% A$59/tonne Operating Cash Cost Operating cash flow of $60
Slide 6: Safety Performance
Safety Performance YAL SITES 12-mth Rolling TRIFR & LTIFR 12 Month Rolling TRIFR Weighted Industry Benchmark TRIFR • Rapid and successful 12 Month Rolling LTIFR 12 implementation of a COVID response plan. 10 • No COVID cases or 8 significant operational 6 affect at the mines. • Met the additional 4
Slide 7: Controllable and Uncontrollable factors
Controllable and Uncontrollable factors Operating factors 2019 2020 Change Observations Average realised sales price 111 82 -26% Set by market conditions (A$/t) Attributable production 35.6 38.3 +8% Increased Moolarben stake (million tonnes) Attributable sales 35.6 37.9 +6% No sales volume disruptio
Slide 8: Coal market conditions
Coal market conditions • Average realised thermal coal price of A$76/t was • Average realised met. coal price of A$124/t was down down 24% from 2019 as lower economic activity 26% from 2019 as low-grade met. coal prices declined affected demand for thermal coal. due to reduced steel making activity.
Slide 9: Customer base and product mix
Customer base and product mix • Diverse customer base limits the impact from 2020 2019 % Change Thermal coal disruption from any one market. A$/t 76 100 -24% price achieved Metallurgical coal A$/t 124 167 -26% • 2020 Product mix was 89% thermal coal with some price achieved Combined coal A$/t 82 111
Slide 10: Coal Production
Coal Production Attributable Saleable Production by Asset * (Million tonnes) • Delivered on 2020 guidance of ~38Mt of Moolarben MTW HVO Yarrabee Stratford Duralie Watagan attributable saleable coal production. Non-attributable 60 52.1 51.8 • The 8% increase in attributable saleable coal 50.0 50 incl
Slide 11: Unit costs beat the 2020 guidance
Unit costs beat the 2020 guidance Cash operating costs (per production tonne) (A$/tonne) • A$59/t Cash operating costs, -8% YoY, and Cash operating costs Royalty Implied operating cash margin below the original target of A$63/t set 12 150 months ago.* • 2020 Unit costs had the temporary benefit of l
Slide 12: Financial Summary – Price impact cascades through
Financial Summary – Price impact cascades through Income Statement 2019 2020 Change Observations ($ millions) Correlated to realised sales Revenue 4,459 3,473 -22% price Lower revenue directly Operating EBITDA 1,654 748 -55% impacts the EBITDA Depreciation and Increased output and (607) (804) 32% am
Slide 13: Price, Revenue and EBITDA
Price, Revenue and EBITDA Revenue and Average realised price EBITDA and Margin (A$ Million) | (A$/tonne) (A$ Million) | (%) Revenue Average selling price, A$/t Operating EBITDA EBITDA Margin 7,000 132 140 3,000 45% 6,000 114 120 111 2,500 38% 2,180 36% 5,000 4,850 100 4,459 2,000 80 82 4,000 80 1,65
Slide 14: Operating EBITDA Drivers
Operating EBITDA Drivers 2019 to 2020 drivers of the change in Operating EBITDA (A$ million) External factors Lower unit costs, but higher output resulted in higher costs on an absolute basis The lower coal price was the most significant factor 13
Slide 15: 2020 Loss After Tax has non-operating items
2020 Loss After Tax has non-operating items Profit / (Loss) after tax (A$ Million) Profit / (Loss) after tax • Reported Loss includes two sizable non-cash, 1,000 852 719 non-operating items; a $653 million gain on the 500 Moolarben revaluation in 1H20 and 229 $1,383 million accounting loss on the Wa
Slide 16: Fiscal position affected but not compromised
Fiscal position affected but not compromised Cashflow and 2019 2020 Change Observations Balance Sheet Operating cash flow 1,548 605 -61% Cash flow still sound ($ million) Cash at end of period After Moolarben stake and 962 637 -34% ($ million) 2019 Final dividend Gearing ratio Post Watagan 29% 41% -
Slide 17: Operating Cash flow
Operating Cash flow Operating Cash flow (A$ Million) Operating cash flow • $3.0bn in payments to suppliers and 2,000 employees in 2020 was similar to 2019. 1,747 1,548 • The ~$900 million reduction in revenue is 1,500 reflected in the Operating Cash flow • At 31 December 2020 the ‘cash and cash 1,00
Slide 18: Debt and Distributions
Debt and Distributions Annual Net Debt* and Gearing Ratio** (A$ Million) | (%) • Debt and gearing levels now include Net debt, A$ mn Gearing ratio, % 5,000 4,761 Watagan components that were previously 4,516 4,500 78% held off-balance sheet. 4,000 3,568 • A US$1.275 billion debt facility that had 3,
Slide 19: Guidance for 2021
Guidance for 2021 Guidance Original 2020 2020 Outcome 2021 Guidance component Guidance Attributable saleable Around Around coal production 38 million tonnes 38.3 million tonnes 39 million tonnes Attributable cash operating cost Around $63/tonne $59/tonne $60 to 62/tonne (excl. government royalties)
Slide 20: The case for investment
The case for investment ✓ Three low cost, large-scale assets underpin the business, especially during cyclical downturns ✓ Diverse customer base continues to demonstrate appetite for Yancoal product ✓ Asset reinvestment and shareholder returns are a priority ✓ Debt optimisation and reduction is an o