Newcrest Mining — FY2020 Earnings Presentation
27 slides from Newcrest Mining's earnings presentation, Aug 14, 2020
Slide 1: FY20 Full Year Results
NEWCREST FY20 Full Year Results Sandeep Biswas Managing Director and Chief Executive Officer Gerard Bond Finance Director and Chief Financial Officer
Slide 2: Disclaimer
Disclaimer Forward Looking Statements This presentation includes forward looking statements. Forward looking statements can generally be identified by the use of words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “continue”, “outlook” and “guidance”, or other similar
Slide 3: Newcrest Mining Limited
Newcrest _ Mining Limited
Slide 4: Safety and Sustainability
Safety and FY20 Key Sustainability Achievements Operational Financials results Our growth Summary story
Slide 5: Continued Focus on Safety
Total Recordable Injury Frequency Rate1 (per million hours worked) Continued Focus on Safety Safety Transformation Red Chris injury rates are FY20 TRIFR & improvements at most operations much higher than the Newcrest average which is driving the higher FY20 Cadia Telfer TRIFR. 4.9 17% 4.9 35% Exclud
Slide 6: FY20 Key Achievements
Safety and FY20 Key Sustainability Achievements Operational Financials results Our growth Summary story
Slide 7: FY20 Key Achievements
Safety • Zero Fatalities and 13% reduction in TRIFR (excluding Red Chris) FY20 Key • COVID-19 impacts successfully managed in the period Achievements Growth • Continue to deliver against our growth pillar • ~$1.7 billion invested in growth activities • Exciting pipeline of growth projects including
Slide 8: Operational results
Safety and FY20 Key Sustainability Achievements Operational Financials results Our growth Summary story
Slide 9: Cadia: World class asset
World class Cadia asset Gold Production (koz) 913 843 • Grade decline on prior period in line 620 600 with expectations • Achieved record mined and milled tonnes in the period • Strong free cash flow generation • Water concerns FY17 FY18 FY19 FY20 alleviated • Cadia Expansion and AISC ($/oz) Moly pl
Slide 10: Lihir: Challenging year
Challenging Lihir year Gold Production (koz) 940 955 933 • Lower grade and 776 recoveries in the period • Higher proportion of stockpiled ore feed processed • Autoclave maintenance and clay FY17 FY18 FY19 FY20 in feed material impacted recovery rates AISC ($/oz) 1,206 • Improvement plan 934 887 unde
Slide 11: Lihir Pit Optimisation Study focus areas
Lihir Pit Optimisation Study focus areas • Improve ore presentation to processing plant • Minimise impact of clay on materials handling system & autoclaves • Optimising integration of seepage barrier project into mine schedule • Increasing access to ore to offset higher expected cost of seepage barr
Slide 12: Telfer: Solid performance
Solid Telfer performance Gold Production (koz) 452 • Lower milled volumes 426 386 393 as planned • Free cash flow improved by $43 million • $82 million impact to revenue from gold hedges • Latent infrastructure FY17 FY18 FY19 FY20 value to be realised with Havieron AISC ($/oz) 1,281 development 1,26
Slide 13: Red Chris: Stabilising performance
Stabilising Red Chris performance 15 Gold Production (koz) 12 • Improved safety performance 9 • Investing in the future • Exciting drill results 3 Q1 Q2 Q3 Q4 FY20 4,317 AISC ($/oz) 1,857 1,413 1,536 Production and AISC is reported at Newcrest’s attributable share of 70% Q1 Q2 Q3 Q4 FY20 13
Slide 14: Financials
Safety and FY20 Key Sustainability Achievements Operational Financials results Our growth Summary story
Slide 15: Investing in growth from a position of strength
Investing in growth from a Strong financial Robust performance balance sheet position of - Refinanced existing debt strength - Underlying profit of $750m - Successful equity raising - Statutory profit of $647m - Well within financial policy - Free cash flow before M&A metrics activity of $670m1 Inve
Slide 16: Newcrest has a high level of exposure to a rising gold price
Newcrest has Proportion of FY20 gold production exposed to gold price a high level 100.0% of exposure 80.0% to a rising 60.0% gold price 40.0% 20.0% 0.0% Saracen St Barbara Northern Star Evolution Newcrest • In the period, Newcrest’s gold ounces had the greatest exposure to the 1. The proportion of
Slide 17: Estimated cash flow impact of COVID-19 in FY20
Employees & Contractors Estimated cash flow impact of COVID-19 in FY20 1. Labour costs includes pandemic leave, costs associated with roster changes, additional coverage, overtime and allowances 2. Other costs includes medical related expenditure, additional shutdown costs, additional contractor cos
Slide 18: Cumulative free cash flow $3.5 billion
Invested ~$1.3bn Cumulative free cash flow ($m) in M&A activities in FY20 $3.5 Billion 1. Cash investment in M&A activity in FY20 comprises the payment for the acquisition of Red Chris (70% ownership) of $769 million, the acquisition of Fruta del Norte finance facilities of $460 million, further inv
Slide 19: Debt structure optimised
1 Maturity profile as at 30 June 2020 Debt structure optimised ($m) • Refinanced debt at lower coupon rates and smoothed and extended the debt maturity profile • Weighted average maturity profile now ~16 years (previously ~7 years) • Secured long term debt funding at coupons much lower than existing
Slide 20: Strong financial position
Leverage Ratio (Net Debt / EBITDA) Gearing Ratio Strong Target less than 2.0x Target less financial (for trailing 12 months) than 25% position 15.1% 11.5% 0.8x • Continue to be 0.6x 6.8% 4.9% comfortably within our 0.2x 0.3x financial policy targets 31 Dec 2018 30 Jun 2019 31 Dec 2019 30 Jun 2020 31
Slide 21: Increasing returns to shareholders
Increasing Dividends1 (US$/share) Increasing returns to 0.30 shareholders 0.25 14% 0.20 US$ per share 0.15 0.10 0.05 0.00 FY16 FY17 FY18 FY19 FY20 • Fifth consecutive year of dividend increases • Targeting a total dividend payment of at least 10-30% of free cash flow • With the dividend being no les
Slide 22: Our growth story
Safety and FY20 Key Sustainability Achievements Operational Financials results Our growth Summary story
Slide 23: Growing Havieron
Growing Havieron Jun-19 Dec-19 Jun-20 • Havieron continued to grow over FY20 +464200 E +463800 E +464000 E • Expecting to commence decline by OPEN ? the end of CY20 or ? early 2021 OPEN ? ? ? ? ? ? ? ? ? 0 lphide Zone al Dyke +464200 e 0.5g/t Au Leapfrog Shell e 1.0g/t Au Leapfrog Shell 0 100 0 +464
Slide 24: Red Chris
Red Chris • Two high grade pods intersected in FY20 The information in this slide that relates to exploration results at Red Chris has been extracted from the Newcrest release titled “Quarterly Exploration Report” dated 23 July 2020 and other prior exploration releases. 1g/t Au, 2 g/t Au, 1 g/t AuEq
Slide 25: Summary
Safety and FY20 Key Sustainability Achievements Operational Financials results Our growth Summary story
Slide 26: What makes Newcrest different
What makes Newcrest Long Low cost different reserve life production Do what Organic growth options (at Cadia, Lihir, Wafi-Golpu, we say Havieron & Red Chris) Strong exploration & technical Financially robust capabilities 26
Slide 27: Find out more: www.newcrest.com
Find out more: www.newcrest.com Engage with us +61 3 9522 5717 +1 (647) 255 3139 27