Slide 1: Whitehaven Coal Limited Full Year Results FY2017
Whitehaven Coal Limited Australia’s Leading High-Quality Coal Company FULL YEAR RESULTS FY2017 17 AUGUST 2017
Slide 2: Disclosure
Disclosure STATEMENTS CONTAINED IN THIS MATERIAL, PARTICULARLY THOSE REGARDING THE POSSIBLE OR ASSUMED FUTURE PERFORMANCE, COSTS, DIVIDENDS, RETURNS, PRODUCTION LEVELS OR RATES, PRICES, RESERVES, POTENTIAL GROWTH OF WHITEHAVEN COAL LIMITED, INDUSTRY GROWTH OR OTHER TREND PROJECTIONS AND ANY ESTIMATE
Slide 3: Agenda
Agenda – Highlights – Safety – Financial Performance – Operations – Community – Outlook for Coal Use – Outlook for Whitehaven – Appendices – Additional Information 3 // FULL YEAR RESULTS PRESENTATION FY2017
Slide 4: Record Year Highlights
Record Year Highlights WHITEHAVEN REPORTS RECORD PROFIT IN ITS 10TH ANNIVERSARY OF ASX LISTING Profitable Safety half year at cyclewith improved lowsthe Record full year net profit TRIFR declining to 7.4 at Y/E including significant items of $405.4 million up 1,879% Equity coal sales of Record EBITD
Slide 5: Safety
Safety
Slide 6: Safety Performance
Safety Performance SAFETY PROGRAMMES ARE DELIVERING IMPROVED OUTCOMES Whitehaven Coal Group – TRIFR (12 Month Rolling – Whitehaven recorded its lowest TRIFR Average Recordable Injuries per Million Hours Worked) of 7.4 at the end of June, significantly 30 lower than the NSW TRIFR average of 25 14.7 2
Slide 7: Financial Performance
Financial Performance
Slide 8: Financial Highlights
Financial Highlights HIGHER COAL PRICES FLOWING DIRECTLY TO PROFITS, DISTRIBUTION AND CASH FLOW Profit and loss FY2017 FY2016 Comment Net profit after tax ($’m) – Up 1,878%, record full year 405.4 20.5 including significant items result EBITDA before significant – Up 219% on pcp, higher volumes 714.
Slide 9: Record Profit – Highest in Company History
Record Profit – Highest in Company History HIGHER COAL PRICES FLOWING DIRECTLY TO PROFITS Financial Performance - A$ millions H2 FY2017 H1 FY2017 FY2017 FY2016 Revenue 949.7 823.5 1,773.2 1,164.4 Other income 1.9 5.8 7.7 8.4 Operating expenses (317.7) (271.4) (589.1) (515.4) Rail, Port, Marketing an
Slide 10: Strong Margin
Strong Margin INCREASED REVENUE AND TIGHT COST CONTROL – The strong increase in revenue and FY2017 FY2016 modest increase in costs reflected in the Coal Sales (equity basis, excl. purchased improved margin Mt 15.5 15.4 coal) – Average received metallurgical and Average revenue (excl. purchased coal
Slide 11: Strong Balance Sheet
Strong Balance Sheet WHITEHAVEN IS WELL POSITIONED FOR THE FUTURE 30 June 2017 30 June 2016 – Net debt reduced by $528m over FY2017 $’m $’m – Gearing and leverage at sustainable levels Cash on hand 87.1 101.5 – The strengthened balance sheet has provided Senior secured bank facility 325.0 835.0 the
Slide 12: Strengthening the Balance Sheet
Strengthening the Balance Sheet RAPIDLY IMPROVING SINCE MAULES CREEK MINE DECLARED COMMERCIAL Whitehaven's Net Debt ($m's) and Gearing – Net debt has fallen by more than $600 1200 million over the past two years as the 24% financial contribution from the new 1000 23% Maules Creek mine grows 800 – Ge
Slide 13: Capital Allocation
Capital Allocation EMPHASIS ON DEBT REDUCTION Capital Allocation FY2017 ($m’s) 655 (48) (19) (70) (4) 19 (539) 101 (8) 87 30-Jun-16 Cashflow from Net Interest Sustaining Growth Capex Exploration & Proceeds from Repayment of Purchase of 30-Jun-17 Operations Capex Other Borrowings Borrowings Shares 13
Slide 14: Growth and Sustaining Capex Spend
Growth and Sustaining Capex Spend SUSTAINING CAPITAL SPENT TO MAINTAIN BUSINESS THROUGH THE CYCLE Whitehaven's Capex ($m's) 300.0 250.0 200.0 150.0 – Growth capex has fallen significantly since 100.0 50.0 Maules Creek construction and the Narrabri 0.0 face widening was completed and is set to FY2015
Slide 15: Operations
Operations
Slide 16: Coal Sales
Coal Sales STRONG PERFORMANCE FROM MAULES CREEK Equity Basis – 000t FY2017 FY2016 Change Maules Creek 6,659 5,565 20% Narrabri 4,776 5,273 (9%) Gunnedah Open Cuts 3,963 4,502 (12%) Coal Trading 417 171 Whitehaven Total 15,815 15,511 2% Whitehaven Managed Whitehaven Managed and and Equity Equity Coal
Slide 17: Selling to Premium Markets
Selling to Premium Markets DEVELOPING NEW MARKETS IN SOUTH EAST ASIA Thermal Coal Sales FY2017 Coal Sales by Type 100% 14% Japan 2% 80% 3% Taiwan Korea 60% 7% 20% 16% 16% 63% Malaysia 40% Indonesia 53% 61% 68% 11% 20% Other 0% 27% 22% 16% FY2015 FY2016 FY2017 Metallurgical Coal Sales FY2017 LCV Coal
Slide 18: ROM Coal Production - Growing
ROM Coal Production - Growing PRODUCTION GROWTH CONTINUES AT ALL MINES Equity Basis – 000t FY2017 FY2016 Change Maules Creek 7,297 5,870 24% Narrabri 5,087 4,822 5% Gunnedah Open Cuts 5,334 5,068 5% Whitehaven Total 17,718 15,760 12% Whitehaven Managedand Whitehaven Managed andEquity Equity ROM ROM
Slide 19: Maules Creek
Maules Creek PRODUCTION CONTINUING TO RAMP UP ON SCHEDULE Saleable Coal Production (Mt) – ROM coal production of 9.7Mt and saleable 10.0 coal production of 9.0Mt at Maules Creek for 9.0 the year with the mine operating at an 7.4 8.0 annualised rate of 10.5Mt in the second half – Operating costs will
Slide 20: Maules Creek Product Mix
Maules Creek Product Mix PRODUCTION OF HIGHER MARGIN METALLURGICAL COAL INCREASING Maules Creek Product Mix (Mt) – Sales of metallurgical coal reached 2.3Mt for the 12.0 year and is expected to increase to approximately 3.5Mt (35%) in FY2018 10.0 – Customer demand for the metallurgical coal is 8.0 s
Slide 21: Narrabri Performance
Narrabri Performance FACE WIDENING PROJECT COMPLETED Saleable Coal Production (Mt) 8.0 – Narrabri produced 7.3Mt ROM coal and 7.2 7.3 7.0 7.0Mt saleable coal for the year – The 400 metre face widening project was 6.0 5.2 completed on schedule and below budget with production from LW107 commencing in
Slide 22: Narrabri Production
Narrabri Production GEOLOGICAL FEATURES LIMIT FY2019 AND FY2020 PRODUCTION – ROM coal production guidance for Narrabri in FY2018 expected to be in the range of 8.0Mt to 8.4Mt – The displacement of a fault previously intersected in other longwall panels has increased to a level where the longwall wil
Slide 23: Narrabri’s Future
Narrabri’s Future SIGNIFICANT ADDITIONAL MINE LIFE AT NARRABRI – Mine life at Narrabri can be increased by many years by: Incorporating the Narrabri South exploration licence (EL) into the current mine plan, and The successful application for an EL for coal under the Operational Allocation provi
Slide 24: Gunnedah Open Cuts
Gunnedah Open Cuts STRONG PRODUCTION PERFORMANCE FROM ALL MINES Saleable Coal Production (Mt) – The three open cuts produced a record 6.0 6.1Mt of ROM coal and finished the year 5.1 5.1 5.0 with good stock levels. This coal will be 4.8 4.3 sold during the first half of FY2018 4.0 – Our portfolio of
Slide 25: Vickery Update
Vickery Update EIS EXPECTED TO BE LODGED AT THE END OF SEPTEMBER Project is approved as a 4.5Mtpa open cut by the NSW Government. Whitehaven is seeking approval to increase production to 10Mtpa ROM coal Location About 25kms north of Gunnedah Resources and Reserves Resource of 505Mt, Underground Reso
Slide 26: Indicative Timetable for Vickery
Indicative Timetable for Vickery INCREASES WHITEHAVEN’S MANAGED PRODUCTION TO OVER 30MTPA WHEN FULLY RAMPED The average CV and coking properties of the thermal and metallurgical coal products from Vickery, will be better than those currently produced at Maules Creek September 2017 EIS lodged, approv
Slide 27: Community
Community
Slide 28: Working with the Community
Working with the Community HISTORICAL AND ONGOING COMMITMENT TO THE NORTH WEST NSW REGION COMMUNITY COMMUNITY $1 BILLION 90 INVESTMENT IN REGION DONATIONS MADE SINCE 2012 PEOPLE PEOPLE 1,500 WORKFORCE 12% OPERATIONAL LARGEST PRIVATE ROLES AT MAULES EMPLOYER IN REGION, CREEK CARRIED OUT APPROX 75% LI
Slide 29: Outlook for Coal Use
Outlook for Coal Use
Slide 30: World Coal Demand is Increasing
World Coal Demand is Increasing CRU IS FORECASTING STEADY COAL DEMAND GROWTH Coal Demand by Industry (Bt) 7.0 6.0 – Annual global thermal coal demand is 5.0 forecast to grow from 5.8Bt in 2016 to 6.5Bt 4.0 in 2035 an increase of 0.7Btpa 3.0 – Almost all of the demand growth is occurring 2016 2020 20
Slide 31: Asian Electricity Capacity Growth
Asian Electricity Capacity Growth INSTALLATION OF COAL FIRED GENERATION CAPACITY IN ASIA GROWS STRONGLY Asian Coal Fired Electricity Capacity 2016 - 2040 (GW) – Coal fired electricity generation capacity in 1000 800 Asia is forecast to grow by a net 676GW 600 from 2016 to 2040 400 200 – Electricity
Slide 32: Asian Generation Capacity
Asian Generation Capacity GROWTH IN ASIAN GENERATION CAPACITY IS SIGNIFICANT Installed Coal Fired Electricity Generation – Most of the world’s new coal fired Capacity (GW) capacity is being added in the Asian 450.0 region as these countries develop 400.0 their economies and provide electricity 350.0
Slide 33: Installing HELE Technology
Installing HELE Technology ASEAN COUNTRIES ARE MOVING TO HELE TECHNOLOGY – Over 19 countries that incorporated the use of ASEAN Coal Fuelled Capacity Under coal in their NDCs (representing 44% of global Construction & Planned 2016 (80GW) emissions), have ratified the Paris Agreement and included the
Slide 34: Outlook for Whitehaven
Outlook for Whitehaven
Slide 35: Whitehaven’s Production Profile
Whitehaven’s Production Profile MAULES CREEK RAMP UP AND VICKERY CONTRIBUTE TO GROWTH Actual and Forecast Saleable Coal Production – Ramping up of production from Maules (100%, Mt) Creek continues 30 – Saleable coal production in FY2018 25 expected to be in the range of 22Mt to 23Mt (100% basis) 20
Slide 36: Embedded Growth Opportunities
Embedded Growth Opportunities OPTIONS TO GROW SHAREHOLDER VALUE – Increase the approval limit at Maules Creek from 13Mtpa ROM to 15+Mtpa ROM – Extend the longwall panels into the south area at Narrabri, increasing LOM and annual production – Seek additional lease opportunities to the north west of t
Slide 37: Targets for FY2018
Targets for FY2018 GROWING PRODUCTION SAFELY AND INCREASING SHAREHOLDER RETURNS Operations − Continue improving safety performance − Deliver saleable coal production guidance in the range of 22Mt to 23Mt (100% basis) − Limit cost increase in FY2018 to the range of $1/t to $2/t compared to FY2017 − E
Slide 38: Whitehaven Coal
www.whitehavencoal.com.au >» WHITEHAVEN COAL WHITEHAVEN
Slide 39: Appendices
Appendices
Slide 40: Location
Location 40 // FULL YEAR RESULTS PRESENTATION FY2017
Slide 41: Coal Resources – August 2017
Whitehaven Coal Limited – Coal Resources – August 2017 Measured Indicated Measured + Inferred Competent Report Tenement Resource Resource Indicated Resource Person Date (A) (B) (A + B) (C) CL375 AUTH346 Resources Maules Creek Opencut* 220 400 620 30 1 Mar-17 EL8072 Narrabri North Underground** ML160
Slide 42: Reserves
Reserves Whitehaven Coal Limited – Coal Reserves – August 2017 Recoverable Reserves Marketable Reserves Competent Report Tenement Proved Probable Total Proved Probable Total Person Date Maules Creek Opencut* CL375 AUTH346 190 310 500 175 265 440 1 Mar-17 Narrabri North Underground** ML1609 69 55 124
Slide 43: Additional Information
Additional Information
Slide 44: Capital Allocation
Capital Allocation Capital Investment - $ Million FY2017 FY2016 Mine Sustaining Capital Gunnedah open cuts 1.7 3.9 Maules Creek 2.6 - Narrabri 16.6 11.3 Total Sustaining Capital 20.9 15.2 Expansion and Other Capital Investment Maules Creek 11.1 14.6 Narrabri - mains development 11.2 19.4 Narrabri fa
Slide 45: Balance Sheet
Balance Sheet A$ millions 30 Jun 2017 30 Jun 2016 Cash 87.1 101.5 Current receivables 113.3 62.1 Other current assets 101.6 69.1 Current assets 302.0 232.7 Non-current receivables 10.9 15.4 Other non-current assets 3,654.2 3,827.6 Total assets 3,967.1 4,075.7 Current payables 166.1 135.9 Current int