Slide 1: The resource investment that pays
The resource investment that pays Half Year Financial Results and Outlook for the period to 31 December 2021
Slide 2: Important notices and disclaimer
Important notices and disclaimer This presentation has been prepared by Deterra Royalties Limited (“Deterra”, “the Company”). By accessing this presentation you acknowledge that you have read and understood the following statement. The material in this presentation is general background information
Slide 3: Corporate overview
Corporate overview Share price1 $4.49 Managing Director, CEO Julian Andrews Shares on issue 528.5m Independent Non-Executive Chair Jenny Seabrook Market capitalisation $2.4bn Non-Executive Director Graeme Devlin Cash (31 Dec 2021) $29.4m Non-Executive Director Joanne Warner 1H’22 Dividend 11.68¢ Non
Slide 4: Business Highlights
Business Highlights Underlying assets and business model provide a positive start to FY2022 • Strong operating performance at Mining Area C as production volumes Simple business model increase to 49.2 million wet metric tonnes, up 45% HoH performing well • Ramp-up of South Flank Project remains on t
Slide 5: What we offer investors
What we offer investors MAC royalty covers a world class iron ore hub, Quality Operated by BHP the world’s largest mining company1 Margins 96% EBITDA Margin2 Dividends 100% of NPAT, Fully Franked paid to date3 South Flank expected to grow MAC volumes to 145Mwmtpa 4 Growth Patient and disciplined app
Slide 6: A better way to invest in resources
A better way to “Top line” cashflows Commodity price leverage Project optionality invest in resources Royalty revenue Asset expansions Direct exposure to and extensions Reduce operational exposure, derived from asset’s revenue underlying drive value of capture upside line. commodity price. royalty i
Slide 7: Financial Results
Financial Results Simple business model continues to deliver strong financial performance 7
Slide 8: 1H'22 Highlights
1H’22 Highlights Strong financial performance reflecting simple business model REVENUE $92.8M EBITDA1 $88.7M 96% EBITDA MARIGN PAYOUT NPAT $61.7M 100% NPAT DIVIDENDS $61.7M 11.68¢/sh Half-Year (1) See notes on slide 2 – Non-IFRS Measures. 8
Slide 9: Mining Area C Royalty Performance
Mining Area C Royalty Performance MAC reported significant increases in production volumes, up 45% on the preceding half MAC quarterly receipts and implied sales price AUD million, A$/tonne (FOB, Australia) • BHP’s MAC operation has performed strongly with Revenue royalty (A$M) Capacity payment (A$M
Slide 10: Simplified Income Statement
Simplified Income Statement Illustrative 1H22 statement of profit or loss AUD million Total Costs $4.3 million Net Tax Impact $26.8 million MAC $92.66 million Total Revenue $92.8 million $61.7 million 1H22 NPAT Other $0.18 million 10
Slide 11: Delivering strong shareholder returns
Delivering strong shareholder returns Continuing to build a track record of disciplined capital management and shareholder returns Dividend History AUD million Deterra’s capital management framework 60.9 61.7 • Prioritise returns to shareholders whilst Prioritise acknowledging the opportunity to inv
Slide 12: Capital structure for growth and returns
Capital structure for growth and returns The high-quality MAC cash flows and conservative capital management provides Deterra with strong capacity to fund growth and dividends Other New Royalty Cornerstone MAC Royalty Royalties Revenue New Royalty revenue = 1.232% of 5 x small investments Potential
Slide 13: Strategy and outlook
Strategy and outlook Maximise returns and grow value responsibly 13
Slide 14: Royalty and streaming company landscape
Royalty and streaming company landscape Deterra holds a leading position in the non-precious royalty streaming sub-sector Listed Royalty Companies1 Opportunity Pool of Non-Precious Focused Listed Existing Royalties2 Royalty Companies1 Total US$63bn market cap 29% of Existing Royalties Altius Mineral
Slide 15: Our core asset – the Mining Area C Royalty
Our core asset – the Mining Area C Royalty… Low-risk exposure to a large, low-cost iron ore mining complex that is set to grow its volumes by approximately 2.4 times2 Low-cost operations with long life Significant near-term growth through Resource upside in a low-risk South Flank expansion jurisdict
Slide 16: … is leveraged to South Flank growth
… is leveraged to South Flank growth Deterra’s MAC Royalty revenue is determined by BHP’s realised iron ore prices, sales volumes and foreign exchange rates Revenue royalty payment of 1.232% of realised AUD FOB revenue from sale of MAC product: MAC Royalty annual receipts – Illustrative sales and pr
Slide 17: Strategy focused on value-accretive growth
Strategy focused on value-accretive growth Deterra’s screening process and investment criteria prioritise opportunities where it has a competitive advantage Primary royalties How we prioritise opportunities Investment criteria Creating new royalties for: • Project capital Size Commodity Geography St
Slide 18: Committed to sustainable shareholder returns
Committed to sustainable shareholder returns Our sustainability roadmap outlines our commitment to transparent reporting of our ESG performance and objectives • Established Human Rights Policy • Published first Corporate Governance Statement Complete • Completed Voluntary Tax Disclosure • Developed
Slide 19: A better way to invest in the resources industry
A better way to invest in the resources industry Summary Our Business Model 1 MAC royalty is one of the world’s best royalty assets 2 Superior EBITDA margin of 96% in 1H22 3 Prioritised returns with 100% of NPAT dividend payout ratio, fully franked paid to date1 South Flank project remains on track
Slide 20: For more information
For more information: Investor and Media enquiries Matthew Schembri Investor Relations Manager Mobile: + 61 (0) 427 821 380 Email: matt.schembri@deterraroyalties.com Brendan Ryan Chief Financial Officer Email: investor.relations@deterraroyalties.com Deterra Royalties Limited ACN 641 743 348 Level 5,
Slide 21: Income statement
Income statement Statement of profit or loss Half-year ended Half-year ended 31 Dec 2021 31 Dec 20201 Royalty Revenue 92,848 53,859 Operating Expenses (3,666) (1,139) Business Development Expenses (482) (90) Depreciation and Amortisation (198) (170) Demerger Expenses - (4,637) Operating profit befor
Slide 22: Balance Sheet
Balance Sheet $’000 31-Dec-21 30-Jun-21 Cash and cash equivalents 29,431 24,206 Trade and other receivables 33,229 54,955 Prepayments 1,445 644 Total Current Assets 64,105 79,805 Royalties intangible assets 8,748 8,903 Other intangible assets 5 5 Property, plant, and equipment 33 30 Prepaymetns 33 5
Slide 23: Underlying EBITDA and earnings adjustment
Underlying EBITDA and earnings adjustment Earnings and earnings adjustments1 Half-year ended Half-year ended 31 Dec 2021 31 Dec 20202 $’000 $’000 Net Profit After Tax 61,702 33,341 add back income tax expense 26,751 14,405 add back income tax expense on acquired receivable - 6,512 Profit before tax