Coronado Global Resources Inc. · ASX:CRN
Coronado Global Resources — UBS Australasia Conference 2018
30 slides from Coronado Global Resources's conference presentation, Nov 13, 2018
Slide 1: UBS Investor Presentation ASX Announcement
ASX Announcement 13 November 2018 UBS Investor Presentation For personal use only Attached is a copy of the Investor Presentation to be given at the UBS Australasian Conference on 13 November 2018. Ben Pentelow General Counsel – Australia and Assistant Company Secretary. – Ends – For further informa
Slide 2: UBS Australasia Conference 13 November 2018
For personal use only UBS Australasia Conference 13 November 2018 Ayten Saridas, Group Chief Financial Officer NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 3: Important notices and disclaimer
Important notices and disclaimer THIS PRESENTATION IS NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (AS DEFINED BELOW). Important Notice and Disclaimer You must read the following notices (Disclaimer) before reading or making any use of an
Slide 4: Important notices and disclaimer
Important notices and disclaimer INDUSTRY DATA This Presentation contains industry information included in reports prepared by AME Consulting Limited (AME) (‘Coal Industry Report’ dated 4 May 2018) and Wood Mackenzie, Inc. (Wood Mackenzie) (‘US Metallurgical Coal Market Report’ dated September 2018)
Slide 5: Important notices and disclaimer
Important notices and disclaimer EFFECT OF ROUNDING A number of figures, amounts, percentages, estimates, calculations of value and fractions in this Presentation are subject to the effect of rounding. Accordingly, the actual calculation of these figures may differ from the figures set out in this P
Slide 6: Coronado overview
Coronado overview 60 Fifth largest met coal producer globally in 2017 and Diversified production base with total saleable largest 50 non-diversified met coal producer(1) production 20.2 Mt in 2017(2) For personal use only Met coal saleable production % 60 40 Curragh 3% 30 11% Buchanan Mt 20 32% 54%
Slide 7: US Operations
US Operations Coronado is the largest US met coal producer by production volume and has a diversified product offering For personal use only • US Operations are located in the CAPP region, a highly active coal producing region, and comprise the producing Buchanan, Logan and Greenbrier complexes, as
Slide 8: Australian Operations
Australian Operations Coronado’s Curragh complex is located in Queensland’s Bowen Basin, one of the world’s premier met coal regions, and exports met coal products globally to leading steelmakers For personal use only • Australian Operations comprises the producing Curragh complex (Curragh) and Mine
Slide 9: Strategy for long-term value creation
Strategy for long-term value creation Deliberate and disciplined strategy driving business performance and long-term growth For personal use only Driving value uplift at Curragh 1 New agreement with Stanwell Additional Resources of 318 Mt have become accessible since acquisition through new Stan
Slide 10: Driving value uplift at Curragh
1 Driving value uplift at Curragh Coronado has unlocked significant value at Curragh For personal use only Asset has been significantly de-risked since acquisition Subsequent met coal transactions (e.g. Rio Tinto) further ✓ Attractive and support value proposition well timed Certain ASX coal c
Slide 11: Incremental volumes drive substantial uplift at Curragh
1 Incremental volumes drive substantial uplift at Curragh Material reduction in cost base for incremental tonnes at Curragh For personal use only Stanwell rebate(1) FY2019 indicative increment cost (US$/t) An export price rebate of: US$/t Tier 1 Rebate (capped at 7 Mtpa exports): Payable on coal 120
Slide 12: Capturing higher margin export contracts
2 Capturing higher margin export contracts Higher FY2019 realised prices: • In the US, legacy domestic contracts continued roll off, resulting in higher prices closer to export parity prices For personal use only • In Australia, significant blending opportunities are expected to result in higher ave
Slide 13: Exploiting a strong met coal price environment
3 Exploiting a strong met coal price environment • The Australian HCC forward curve has changed significantly since the beginning of 2018 • Markets have priced in additional upside that was not present 12 months ago, resulting in stronger medium-term forecasts For personal use only Australia Queensl
Slide 14: Delivering returns to shareholders
4 Delivering returns to shareholders Dividend policy For personal use only • The Company intends to pay out 100% of free cash flow(1) relating to the period from Settlement to 31 December 2019 – Target dividend policy of between 60% to 100% of free cash flow(1) post FY2019 • Implied FY2019 dividend
Slide 15: Group level financial summary (EBITDA and free cash flow)
Group level financial summary (EBITDA and free cash flow) Coronado’s FY2019 EBITDA is forecast to increase to US$737m which is expected to deliver strong free cash flow For personal use only Pro forma EBITDA (US$m)(1) • EBITDA is forecast to increase 27.5% to US$737 million driven by $737 $593 $578
Slide 16: FY2019 earnings bridge
FY2019 earnings bridge FY2019 EBITDA which is set to grow 27.5% to US$737m despite forecast lower coal prices For personal use only FY2018 to FY2019 EBITDA bridge (US$m) 38 737 12 (5) 47 89 578 (22) FY2018 EBITDA Coal prices Sales volume Cost of coal Stanwell royalty Other royalty Other (Incl Freigh
Slide 17: Summary IPO metrics – Offer Price of A$4.00/CDI
Summary IPO metrics – Offer Price of A$4.00/CDI For personal use only Summary IPO metrics – Offer Price of A$4.00/CDI US$m A$m Implied Offer EV 2,750 3,792 Net cash(2) 54 74 Market capitalisation 2,804 3,866 EV / FY2019 Implied metrics(4) EBITDA Implied Yield EBITDA(3) Prospectus pricing (HCC US$176
Slide 18: Key takeaways – what differentiates Coronado?
Key takeaways – what differentiates Coronado? ✓ Saleable production in 2018 of 21.1 Mt (78% met coal), and expected to grow to 21.7 Mt in FY2019 (79% met coal) ✓ Marketable Reserves of 657 Mt with implied Reserve life of 33 years based on 2017 production(1) For personal use only Unique met ̶ Coal wi
Slide 19: Appendix
For personal use only Appendix
Slide 20: Investment highlights
Investment highlights Highlight Summary For personal use only Attractive opportunity to invest in a leading independent met coal producer Unique met coal World-class portfolio with large-scale operations in Australia and the US 1 exposure with a – No direct emerging market exposure world-class p
Slide 21: Investment highlights
Investment highlights Highlight Summary For personal use only Core focus is to drive efficiencies and cost optimisation across the current portfolio Value creation through further Growth potential in existing portfolio of assets 5 optimisation and Proven track record of increasing production a
Slide 22: Value creation opportunities at Curragh
Value creation opportunities at Curragh Coronado has implemented value creation opportunities at Curragh with further opportunities identified and to be implemented For personal use only ✓ Improvements in dragline efficiency in the range of 10% already realised at Curragh, with more expected in the
Slide 23: Segmental snapshot
Segmental snapshot Segmental production, revenue and EBITDA (Pro Forma for FY2016 to FY2018 and Statutory for FY2019) Coronado(1) For personal use only Saleable coal production (Mt) Revenue (US$m) EBITDA (US$m) $2,279 $2,343 $737 21.1 21.7 $2,174 $593 $578 20.2 16.1 $1,269 $159 FY2016 FY2017 FY2018
Slide 24: Key financial highlights
Key financial highlights Key financial business drivers FY2019 implied dividend yield (%)(3) For personal use only • The Company intends to pay out 100% of free cash flow(1) Offer Price relating to the period from Settlement to 31 December 2019 A$/CDI 4.00 ̶ Target dividend policy to distribute betw
Slide 25: Coronado operational estimates
Coronado operational estimates Stable base case outlook before Curragh optimisations and newly acquired SRA Estimated saleable production (Mt) Estimated capital expenditure Cash operating costs per saleable For personal use only (US$, real)(1) tonne (US$/t, real)(1) $157.1m 21.7Mt 21.7Mt $56.0/t 21.
Slide 26: Curragh operational estimates (excluding newly acquired SRA)
Curragh operational estimates (excluding newly acquired SRA) Estimated saleable production (Mt) Estimated cash operating costs per saleable tonne For personal use only (A$/t, real)(1) 63.7 2018F 2019F 59.5 58.1 59.6 59.5 57.8 12.4 12.9 12.9 12.9 12.9 12.9 Waste 38.2 35.3 removal 3.2 3.2 Coal mining
Slide 27: Buchanan operational estimates
Buchanan operational estimates Estimated saleable production (Mt)1 Estimated cash operating costs per saleable tonne For personal use only (US$/t, real)2 2018F 2019F 63.2 4.8 4.8 57.2 58.2 56.9 58.2 4.5 4.4 Labour 55.2 0.2 0.2 4.3 16.5 16.7 4.1 costs Direct 27.8 27.4 mining Allocated 5.0 5.2 4.6 4.6
Slide 28: Logan operational estimates
Logan operational estimates Estimated saleable production (Mt)1 Estimated cash operating costs per saleable tonne For personal use only (US$/t, real)2 2018F 2019F 67.7 69.1 67.7 67.8 67.4 3.4 3.5 66.3 3.2 3.3 3.3 3.1 Labour 21.4 20.9 costs 1.2 1.2 Direct 26.5 25.5 mining Allocated 8.3 8.2 costs Sale
Slide 29: Greenbrier operational estimates
Greenbrier operational estimates Estimated saleable production (Mt)1 Estimated cash operating costs per saleable tonne For personal use only (US$/t, real)2 2018F 2019F Labour 111.0 20.8 19.1 106.5 costs 101.2 97.2 99.1 0.9 0.8 Direct 91.3 0.8 0.8 52.9 49.9 0.7 mining 0.0 0.6 Allocated 10.8 10.3 cost
Slide 30: For personal use only
For personal use only
Coronado Global Resources — UBS Australasia Conference 2018 on 6ix