Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — CLSA 2017
29 slides from Fortescue's conference presentation, 2017
Slide 1: CLSA 2017 - The New Force in Iron Ore
Fortescue ‘The New Force in tron Ore CLSA 2017 Together we are Fortescue
Slide 2: Forward looking statements
Forward looking statements Disclaimer Important Notice Additional Information The purpose of this presentation is to provide general information about This presentation should be read in conjunction with the Annual Report at 30 Fortescue Metals Group Limited ("Fortescue"). It is not recommended that
Slide 3: Building a world class company
Building a world class company MG ce Safety focus: engagement, empowerment, leadership —— { — to China
Slide 4: Generating shareholder value
Generating shareholder value Focus on safety, productivity and efficiency Market strategy Operational performance Long life resources Capital discipline Shareholder returns 4
Slide 5: Our Vision: The safest, lowest cost, most profitable iron ore producer
Our Vision: The safest, lowest cost, most profitable iron ore producer Safety Empowerment Family Frugality Stretch targets Ww Fortescue tam couageand Ps Integrity Enthusiasm determination | Senerating ideas Humility The New Force in Iron Ore
Slide 6: Delivering on our targets in FY17
Delivering on our targets in FY17 Sustainable cost reduction and consistent production performance TRIFR 2.9 170.4mt C1 cost 33% reduction Shipped $12.82/wmt 17% reduction A$0.25 21% US$2.7bn Final dividend Net gearing Debt repaid 6
Slide 7: Sustainable cost improvements
Sustainable cost improvements Initiatives delivering long term low cost outcomes US$/wmt Structural improvements 48 44 Solomon + Blending + Processing 34 Productivity and Efficiency 27 Utilisation, Recoveries, Maintenance 15 12.82 11-12 Innovation and Technology Autonomy, Gas, Ore Carriers, Data ana
Slide 8: Maintaining position on the cost curve
Maintaining position on the cost curve China's Iron Ore Supply CFR Costs (including royalties & ocean freight) 2012 2017 Source: Metalytics – March 2017 8
Slide 9: Financial performance
ait Fortescue The New Force in Iron Ore
Slide 10: FY17 financial outcomes
FY17 financial outcomes Operational performance delivering financial results US$2.1bn US$1.8bn US$3.5bn NPAT Cash on hand Free cashflows US$0.67 US$525m A$0.45 113% increase in Revolving credit Total FY17 dividends earnings per share facility 52% pay-out 10
Slide 11: Debt maturity
Debt maturity First maturity in 2022 and a US$525 million revolver facility US$m 3,000 2,500 2,000 1,500 2,160 1,000 500 750 750 0 CY2017 CY2018 CY2019 CY2020 CY2021 CY2022 CY2023 CY2024 Senior Secured Note Senior Unsecured Notes Refer to attached glossary for definition of non-IFRS terms 11
Slide 12: Market
Fortescue The New Force in Iron Ore
Slide 13: Core supplier to Asia
Core supplier to Asia Well established market share of imported iron ore to China Total 2016 global steel production 1,629mt Low impurity 58% Fe average Competitive Large diverse value in use customer base 541 808 Responsive Proximity 79 to market needs to high growth 96 105 region China Japan India
Slide 14: Developing and emerging Asia
Developing and emerging Asia Asian economies generating two thirds of global growth Source: IMFWorld Source: IMF WorldEconomic Economic Database Database April Oct 20162017 14
Slide 15: Iron ore inventory levels
Mt 20 40 60 80 0 100 120 140 160 180 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 Iron ore inventory levels May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 62% Fe
Slide 16: Innovation
Innovation
Slide 17: Generating ideas for future innovation
Generating ideas for future innovation People, processes and techniques are all catalysts for innovation • Exploration techniques • Integrated Operations Centre • Mine planning and optimisation • Harnessing automation • Low cost, relocatable conveyor • Fortescue Ore Carriers 17
Slide 18: World class autonomous haulage operation
World class autonomous haulage operation Building on our success and expanding to the Chichester Hub Improved safety + 56 Operating at Solomon productivity +12 to be converted Chichester Expansion 100 trucks 390mt Material moved at over 3 years Solomon 18
Slide 19: Reserves and resources
ait Fortescue The New Force in Iron Ore vw Reserves and resources
Slide 20: Resource portfolio supports long mine life
Resource portfolio supports long mine life Largest Pilbara tenement footprint: 13bt tonnes Hematite, 7.9bn tonnes Magnetite 20
Slide 21: Active exploration
Active exploration Developing low cost growth options Targeting copper and gold New South Wales ~2,000km2 tenure South Australia ~6,000km2 tenure Ecuador 32 concessions 21
Slide 22: Building strong communities
Building strong communities
Slide 23: Diverse workforce representing our communities
Diverse workforce representing our communities Creating opportunities through training, employment and business development 23
Slide 24: Focussed strategy
PC) Fortescue The New Force in Iron Ore Focussed strategy
Slide 25: FY18 guidance
FY18 guidance Sustainable performance driven by innovation 170mt US$11-12/wmt 75-80% shipped C1 cost Revenue realisation US$3/wmt Depreciation Dividend policy Sustaining capital US$7.40/wmt 50-80% pay-out of NPAT 25
Slide 26: Key strategic focus
Key strategic focus Ensuring our communities benefit from the growth and development of Fortescue Debt repayment and capital flexibility Long term sustainability Returns to shareholders Low cost growth options 26
Slide 27: Sustainable, world class, customer focus
Sustainable World class Low cost producer Assets and people Customer focus Unique culture Reliable and competitive Drives performance 27
Slide 28: www.fmgl.com.au
www.fmgl.com.au @FortescueNews Proudly supporting:
Slide 29: Glossary
Glossary C1: Operating costs of mining, processing, rail and Underlying EBITDA: Earnings before interest, tax, depreciation and port on a per tonne basis, including allocation of amortisation, exploration, development and other direct administration charges and production expenses. The reconciliatio