Alpha Metallurgical Resources, Inc. · NYSE:AMR
Alpha Metallurgical Resources — Investor Presentation (August 2021)
29 slides from Alpha Metallurgical Resources's investor presentation, Aug 6, 2021
Slide 1: Investor Presentation August 2021
Investor Presentation August 2021
Slide 2: Forward Looking Statements
2 Forward Looking Statements This document includes forward-looking statements. These forward-looking statements are based on Alpha's expectations and beliefs concerning future events and involve risks and uncertainties that may cause actual results to differ materially from current expectations. Th
Slide 3: Table of Contents
3 Vision, Execution & Leadership 4 Company Overview – Alpha Advantages 11 Operations Update – Significant Cost Improvements 17 Market Analysis – Macro Environment Trending Positive 21 Conclusion: Alpha Well-Positioned for the Future 25 Appendix 27 Table of Contents
Slide 4: Vision, Execution & Leadership
Vision, Execution & Leadership
Slide 5: Alpha Investment Thesis
5 Alpha Investment Thesis • Largest and Most Diverse Metallurgical Coal Producer in U.S. • Portfolio of Long-Lived Mines and Substantial Organic Reserve Growth Opportunities • Operational Excellence: Cost Reductions, Safety, Environmental • Advantaged Sales & Logistics Platform Serving Both Domestic
Slide 6: Accomplishments and Continued Success
6 Accomplishments and Continued Success Achieved internal safety and environmental performance goals across the company, winning several awards and beating the national average in VPID and NFDL metrics Lowered met costs by ~$20 per ton in 2020 Significantly reduced SG&A expenses; rationalized headco
Slide 7: Pathway to a Pure Metallurgical Portfolio
7 Pathway to a Pure Metallurgical Portfolio 14% 55% 86% 52% 48% 20202016 2017 18% 82% 2018 2023 45% 2019 61% 39% 81% 19% 2021 85% 15% Met 7% 2022 93% Thermal (1) Based on midpoint of guidance. (2) Targeted goal. Metallurgical Shipments Expected to Account for More than 90% of the Total Volume by 202
Slide 8: Cost-Efficient, Well-Managed and Robust Operating Portfolio
8 Cost-Efficient, Well-Managed and Robust Operating Portfolio Note: Production and reserves information as of 12/31/20. List of active mines as of 6/30/21. * Contractor mine ** Surface mine
Slide 9: Recently Completed Low-Cost Mine Development Projects
9 Recently Completed Low-Cost Mine Development Projects • Commenced production on multiple metallurgical coal projects with direct mining costs expected at or below $70 per ton: • Contributed to driving Met cost of coal sales down by ~$20 per ton in 2020 • Reserve bases with lives greater than 20 ye
Slide 10: Experienced Leadership Team Streamlining Decision-Making
10 Experienced Leadership Team Streamlining Decision-Making
Slide 11: Company Overview – Alpha Advantages
Company Overview – Alpha Advantages
Slide 12: Alpha Snapshot
12 Alpha Snapshot (1) NYSE: AMR (1) Metrics as of 12/31/20 unless otherwise noted. (2) Alpha Natural Resources, Inc. founded in 2003. (3) As of 6/30/21. See slide 8 for list of mines and preparation plants. (4) See map on slide 16 for specific countries. (5) Since 2016.
Slide 13: Alpha Advantages – Well Positioned for Longevity
13 Alpha Advantages – Well Positioned for Longevity 58 50 46 30 27 20 Peer 5 Peer 1 Alpha Peer 3 Peer 4 Peer 2 Implied Reserve Life (Years)(1) Met Reserve Life of Public U.S. Met Coal Producers Source: Public Company Filings (1) Calculated as metallurgical reserves divided by 2020A production, or 20
Slide 14: Alpha Advantages – Most Diverse Domestic Met Producer
14 Alpha Advantages – Most Diverse Domestic Met Producer HVA 39% HVB 24% MV 24% LV 13% 12.2 7.9 6.8 5.6 1.7 0.6 Alpha Peer 3 Peer 2 Peer 1 Peer 5 Peer 4 Largest Domestic Met Producer (1)(2) Domestic 29% Export 71% Source: Public Company Filings (1) Includes only U.S. sourced met coal production. (2)
Slide 15: Strong Safety and Environmental Performance Continued in 2020
15 Strong Safety and Environmental Performance Continued in 2020 - Maintained strong 99.9% compliance rate with all federal and state water quality standards since 2016 - Reclaimed ~4,800 acres and planted ~2.7 million trees since 2016 - Multiple operations in both VA and WV received awards for safe
Slide 16: Alpha Advantages – Largest Domestic Met Producer & Exporter
16 Alpha Advantages – Largest Domestic Met Producer & Exporter Note: Map reflects the 23 countries that received Alpha shipments in 2020, plus China, a new addition in 2021. Hampton Roads (Newport News, Virginia) 65% Owned by Alpha (35% by Arch) 22 million tons of capacity (14.3 million attrib
Slide 17: Operations Update – Significant Cost Improvements
Operations Update – Significant Cost Improvements
Slide 18: Improved Productivity and Cost Containment Yielding Significant Cost Savings
18 $60 $65 $70 $75 $80 $85 $90 $95 $100 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 …Has Yielded Met Cost Reductions of ~$20 per ton CAPP - Met costs 3-quarter Moving average Improved Productivity and Cost Containment Yielding Significant Cost Savings 22 15 12 430k tons/mine 673k tons/mine 918
Slide 19: Capex Approaches Maintenance Level in 2021
19 Capex Approaches Maintenance Level in 2021 *Midpoint of Guidance Capex for Black Eagle, Lynn Branch and Road Fork 52 completed In m illi on s $81.9 $192.4 $154.0 $93.0 $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 2018A 2019A 2020A 2021E* Capital Expenditures
Slide 20: SG&A Reductions are Further Indication of Increased Cost Focus
20 $44.6 $60.9 $52.2 $50.0 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 2018A 2019A 2020A 2021E* SG&A SG&A Reductions are Further Indication of Increased Cost Focus *Midpoint of Guidance (1) Contura Energy standalone for Jan – Nov 2018; Combined company thereafter. Note: Excludes expenses related
Slide 21: Market Analysis – Macro Environment Trending Positive
Market Analysis – Macro Environment Trending Positive
Slide 22: Upward Trend in Met Demand Driving Improvement in Pricing
22 Upward Trend in Met Demand Driving Improvement in Pricing Sources: Bloomberg and Platts In m et ric to ns $90.00 $110.00 $130.00 $150.00 $170.00 $190.00 $210.00 $230.00 $250.00 Metallurgical Coal Indices US High Vol A US High Vol B US Low Volatile Premium Low Vol HCC
Slide 23: Crude Steel Production Rebounds Solidly After April 2020 COVID-Related Shutdowns
23 120,000.0 130,000.0 140,000.0 150,000.0 160,000.0 170,000.0 180,000.0 World Crude Steel Production (Monthly Production) Crude Steel Production Rebounds Solidly After April 2020 COVID- Related Shutdowns Source: World Steel Association COVID- related shutdowns in April In m et ric to ns
Slide 24: Solid Steel Demand Growth Expected in 2021 and Beyond
24 Solid Steel Demand Growth Expected in 2021 and Beyond Sources: World Steel Association & Wood Mackenzie 1,767 1,772 1,600 1,750 1,650 1,700 1,800 1,850 2020 2021E2019 1,874 +6% Global Steel Demand Projected Crude Steel Production in India through 2050 320 100 140 200 300 120 160 180 240 220 260 2
Slide 25: Conclusion: Alpha Well-Positioned for the Future
Conclusion: Alpha Well-Positioned for the Future
Slide 26: Conclusion: Alpha Well-Positioned for the Future
26 Conclusion: Alpha Well-Positioned for the Future 1 3 4 Opportunities to build on the significant accomplishments of 2020, which include: • Lowered met production cost by ~$20 per ton • Lowered SG&A(1) by nearly $10 million to ~$52 million • Completed majority of capital investments for new, low-c
Slide 27: Appendix
Appendix
Slide 28: 2021 Guidance
28 2021 Guidance Shipments (million tons) Low High Metallurgical 13.0 14.0 Non-Metallurgical By-Product 1.3 1.8 Met Segment 14.3 15.8 All Other 1.3 1.7 Total Shipments 15.6 17.5 Committed / Priced Volumes(1)(2)(3) % Committed Average Price ($/ton) Metallurgical – Domestic $87.86 Metallurgical – Expo
Slide 29: Cash-Related Outflows Expected to Materially Decrease After 2022
29 Cash-Related Outflows Expected to Materially Decrease After 2022 Cash Outlays (US$ millions) 2021 2022 2023 2024 Acquisition Related Obligations $8.1 $4.3 $ -- $ -- Contingent Revenue Obligations(1) 12.9 13.6 3.5 -- LCC Obligations(2) 13.1 4.8 2.5 -- Reorganization & Transaction-related Cash Outl
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