Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — Goldman Sachs Asia Materials Virtual Tour (May 2020)
20 slides from Fortescue's conference presentation, May 21, 2020
Slide 1: Goldman Sachs Asia Materials Virtual Tour
For personal use only Goldman Sachs Asia Materials Virtual Tour Ian Wells, CFO 21 May 2020 Global force Thriving communities 100-TE-DC-0036_13
Slide 2: Important Notice: Forward Looking Statements Disclaimer
Important Notice The purpose of this presentation is to provide general information about Fortescue Metals Group Ltd ("Fortescue"). It is not recommended that any person makes any investment decision in relation to Fortescue based on this presentation. This presentation contains certain statements w
Slide 3: A world class company
For personal use only A world class company Wholly owned, >1.3 billion tonnes 170 - 175mtpa fully integrated Shipped Shipping rate supply chain Core supplier Industry leading to China cost position 3
Slide 4: COVID-19 response
COVID-19 response Prioritise the health of our people, maintain jobs, sustain our For personal use only business and protect our communities Temporary extension of Additional bus and air operational roster charter services Flexible working Temperature testing and arrangements, non-essential health s
Slide 5: Safety and unique culture
Safety and unique culture For personal use only 2.5 TRIFR Total Recordable Injury Frequency Rate on a 12 month rolling basis 11% Improvement compared to 30 June 2019 Reducing fatality risk profile 5
Slide 6: March quarter 2020 highlights
March quarter 2020 highlights For personal use only TRIFR 2.5 11% improvement from 2.8 in FY19 US$73/dmt Average price received 82% of 62% Fe Index 42.3mt shipped US$13.27/wmt 10% higher than Q3 FY19 C1 costs 2% lower than Q3 FY19 Growth projects US$0.1billion Key milestones achieved Net cash 6
Slide 7: Integrated mine to market infrastructure
Integrated mine to market infrastructure For personal use only 7
Slide 8: Robust demand in China
Robust demand in China For personal use only China’s steel production increased 1.3% YoY in four months to 30 April 2020 China's Crude Steel Production (mt) 90 Fortescue is a core supplier of iron ore to China 85 80 China’s steel production 75 increased to 319mt in 4M CY20 70 Steel inventories drawn
Slide 9: Enhanced product mix delivers value
Enhanced product mix delivers value For personal use only Realising the benefits of West Pilbara Fines Fortescue’s product mix % 9 months to March 2019 9 months to March 2020 10 4 8 8 33 38 45 7 42 4 West Pilbara Fines Kings Fines Fortescue Blend West Pilbara Fines Kings Fines Fortescue Blend 9 Fort
Slide 10: Iron ore prices resilient
Iron ore prices resilient For personal use only Sustained demand and supply disruptions support the iron ore market Iron Ore Prices (CFR China), US$/dmt Strong demand for Fortescue’s 140 products 120 Realisation of 84% of the Platts 100 62% Index, 9M to 31 March 2020 80 60 Draw down of iron ore stoc
Slide 11: Price and margins
Price and margins For personal use only Strong underlying EBITDA margins through all market cycles US$/dmt 100 80 60 40 20 17 24 33 27 24 17 21 57 53 0 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 Underlying EBITDA margin Avg Underlying EBITDA 62 Platts CFR Index Fortescue realised price Avg Fortesc
Slide 12: Capital allocation
Capital allocation For personal use only As at 31 December 2019, Fortescue has generated NPAT of US$17bn and allocated US$9bn of capital to debt repayment and US$6bn to dividends1 Capital allocation to debt and dividends Cumulative Allocation of NPAT: FY05-HY20 US$m US$m 4000 18,000 3000 13,000 2000
Slide 13: Credit metrics
Credit metrics For personal use only Target investment and credit metrics Gearing % Debt maturities profile (US$m) Target 30 – 40 % (Gross debt) (excluding leases) 69% 56% 45% 31% 29% 27% 62% 24% 750 750 49% 38% 21% 24% 16% 5% FY12 FY15 FY16 FY17 FY18 FY19 1H20 600 600 Net gearing Gross gearing 500
Slide 14: Investing in growth
Investing in growth For personal use only Investing in growth Eliwana Mine and Rail (US$m) Iron Bridge Magnetite (US$m) Pilbara Energy Connect (US$m) Disciplined 550-650 allocation to core business, 1,200 innovation and growth 1,200–1,300 - 1,300 350-400 500-600 250-300 400-500 300-400 50 FY20 FY21
Slide 15: Eliwana project
Eliwana project For personal use only US$1.275 billion capital investment, Progressing on schedule and budget Stage 1 earthworks First steel erection on 143km railway completed of 30mtpa dry OPF Aerodrome and village Construction peak completed, first charter June 2020 mid-2020 15
Slide 16: Iron Bridge Magnetite Project
Iron Bridge Magnetite Project For personal use only US$2.6 billion investment delivering enhanced returns to shareholders and JV partners 22 mpta, 67% Fe product Detailed engineering First ore on ship mid-2022 passed halfway mark First blast at OPF site Site construction Allowing earthworks to comme
Slide 17: Energy infrastructure
Energy infrastructure For personal use only US$8001 million investment providing 25–30 per cent of stationary energy requirements from solar Pilbara Transmission project Pilbara Generation project 275km of high voltage transmission lines 150MW gas, 150MW solar PV Large scale battery storage Chichest
Slide 18: FY20 guidance
For personal use only 175-177mt FY20 Shipments Guidance US$12.75-$13.25 C1 cost / wmt US$2.0-2.2 billion Capital investment 18
Slide 19: Vision and values
“ar « Our ra , = ’ Kec “Vision =~ ane vote <The safest, lowest =, ~ / 5 “cost, most profitable | yy } mining company. >... A RR Gee v EY (©) “Fortescue’s Values ee
Slide 20: For personal use only
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Fortescue Metals Group — Goldman Sachs Asia Materials Virtual Tour (May 2020) on 6ix