Slide 1: 2010 Full Year Results
For personal use only 2010 Full Year Results Iluka Resources Limited 25 February 2011
Slide 2: Disclaimer – Forward Looking Statements
Disclaimer – Forward Looking Statements For personal use only This presentation contains information that is based on projected and/or estimated expectations, assumptions and outcomes. These forward-looking statements are subject to a range of risk factors associated, but not exclusive, with potenti
Slide 3: Full Year Overview
Full Year Overview For personal use only • Completion and ramp up of two new operations - substantial contribution from 2nd half of 2010 • Positive pricing dynamics for zircon - favourable market conditions continuing in 2011 • Last year of price constrained titanium dioxide contracts - step change
Slide 4: Main Features of Full Year Results
Main Features of Full Year Results Comparison with 2009 For personal use only Mineral Sands Sales Volumes 28.3% - all high value product sales volumes up, post GEC USD Product Pricing Zircon prices up 30%; contract TiO2, pricing higher but still constrained Higher pricing offset higher AUD/USD M
Slide 5: Health, Safety and the Environment
Health, Safety and the Environment Iluka’s No. 1 Priority For personal use only Total Recordable Injury Frequency Rate 20 18 16 16.41 14 13.50 12 10 9 8 8 7 7 6 5 5 5 5 4 4 3 3 2 1 0 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Recordable Injuries Total Recordable Injury Frequency Rate ("TRIFR") Target
Slide 6: Summary Group Results
Summary Group Results For personal use only $m 1H 2010 2H 2010 2010 2009 % change pcp Mineral Sands Revenue (pre hedging) 378.6 495.8 874.4 576.0 51.8 EBITDA 115.4 189.3 304.7 99.6 205.9 Depreciation and amortisation (101.7) (117.3) (219.0) (176.6) 24.0 EBIT 13.9 72.2 86.1 (144.1) n/a Net interest a
Slide 7: EBITDA 2010 versus 2009
EBITDA 2010 versus 2009 For personal use only ILUKA GROUP EBITDA 2010 vs 2009 A$m 400 26.5 25.7 350 16.2 53.1 (28.2) 300 (50.8) 304.7 115.6 250 200 47.0 150 100 99.6 50 0 2009 EBITDA Sales volumes Sales mix Sales price Unit cost Restructure Other MAC FX 2010 EBITDA reduction 7
Slide 8: Mineral Sands and Group EBITDA
Mineral Sands and Group EBITDA For personal use only $m 350 300 304.7 • Strong 2nd half mineral sands EBITDA - up 64% 250 200 • Higher margin J-A and MB production 189.3 150 250.2 115.4 • Higher 2nd half zircon sales price 100 99.6 154.9 50 75.6 95.3 0 2009 1H 2010 2H 2010 2010 Mineral Sands EBITDA
Slide 9: Net Profit After Tax 2010 versus 2009
Net Profit After Tax 2010 versus 2009 For personal use only ILUKA GROUP NPAT 2010 vs 2009 A$m 18.6 100 11.3 37.1 18.0 47.3 (29.7) 50 (19.7) (19.8) 80.9 (22.9) 36.1 (35.6) 0 2009 Sales mix Sales D&A MAC FX CRL costs 32.9 -50 (82.4) -100 2009 Sales Sales Sales Unit cost Restructure D&A Other MAC Tax &
Slide 10: Mining Area C Royalty
Mining Area C Royalty 2010 vs 2009 For personal use only 2010 2009 % change Annual Production to 30 Jun MDMT 42.5 37.8 12.4 Sales Volume to 31 Dec MDMT 43.2 40.3 7.2 Royalty Income $m 71.3 42.6 67.4 Capacity Payments $m 5.0 8.0 (37.5) Iluka EBIT $m 75.9 50.2 51.2 • Higher iron ore sales volumes • Av
Slide 11: Mineral Sands Operating Cash Flow
Mineral Sands Operating Cash Flow For personal use only $m 200 • Stronger operating cash flow - up 89.1% 163.6 150 • 1st half 2010 operating cash flow reflects: 119.7 - increase in J-A concentrate stocks 100 - increased debtors (shipment timing) 86.5 • 2nd half 2010 operating cash flow reflects: 50
Slide 12: Net Debt Movement
Net Debt Movement For personal use only ILUKA GROUP NET DEBT - 2010 A$m 400 382.1 350 (9.8) (35.7) 300 (81.5) 9.0 8.8 312.6 250 (29.4) (1.5) 200 163.6 (17.9) 150 63.9 100 50 0 Opening net Operating MAC royalty Exploration Interest Tax Capex Capex Asset sales Share FX on debt Closing net debt cash fl
Slide 13: Net Debt and Gearing
Net Debt and Gearing For personal use only Net Debt (A$m ) Gearing (%) 500 35 30 400 25 300 20 15 200 10 100 5 0 0 H1 09 H2 09 H1 10 H2 10 Net Debt Gearing 13
Slide 14: Iluka Sales – Zircon
Iluka Sales – Zircon For personal use only Zircon Sales kt 500 • Sales back to 2008 levels 400 • China above 2008 levels 300 - 47% of Iluka’s 2010 sales 200 • Recovery in Europe and 100 North America 0 2008 1H 2009 2H 2009 2009 1H 2010 2H 2010 2010 • Customer requirements 2008 2009 2010 exceed suppl
Slide 15: Zircon Market Conditions
Zircon Market Conditions For personal use only • Strong recovery in demand in all main markets • Global consumption estimated at 1.3 million tonnes - unmet demand • China imports running at above pre GEC levels - estimated 2010 imports of ~595k tonnes • Since Q2, Iluka unable to satisfy customers’ f
Slide 16: Zircon Constrained Market Supply
Zircon Constrained Market Supply For personal use only • Inner Mongolia zirconia chemical plant which could not commission due to lack of zircon • Similar examples elsewhere in China • New milling capacity unable to be fully utilised 16
Slide 17: Zircon Price and Supply Trends
Zircon Price and Supply Trends For personal use only • Iluka actions: - 3 price increases in 2010 – year end exit price above US$1,000/tonne (FOB) - 1 January price increase of ~20% • Iluka working with customers in tight supply situation: - supply point and logistics flexibility - semi-processed ma
Slide 18: Iluka Sales – Rutile and Synthetic Rutile
Iluka Sales – Rutile and Synthetic Rutile For personal use only Rutile and Synthetic Rutile Sales kt • Strong recovery in North 700 American pigment demand 600 500 • Minimal sales of high grade 400 titanium dioxide to China, 300 given sulphate-orientated 200 nature of pigment market 100 0 2008 1H 20
Slide 19: High Grade Titanium Dioxide Market Dynamics
High Grade Titanium Dioxide Market Dynamics For personal use only • Demand recovery for high grade titanium dioxide feedstocks • Most chloride pigment producers restored operations to full or near full capacity - demand for high grade feedstocks as replacement for lower grade feedstocks - hence incr
Slide 20: Recent TiO2 Industry Comments
Recent TiO2 Industry Comments For personal use only “…provided global demand for TiO2 products remains strong, we expect the low level of worldwide TiO2 inventories to continue for several years and anticipate further implementation of TiO2 selling price increases.” Top 5 Pigment producer, February
Slide 21: High Grade Titanium Dioxide Trends
High Grade Titanium Dioxide Trends For personal use only • 2011 1st year of unconstrained contract price negotiations - small proportion of SR volume still affected by residual “cap and collar” contract - unable to fully meet all customer requirements - rutile and SR pricing set for 6 months period
Slide 22: 2011 Areas of Focus
2011 Areas of Focus For personal use only • Operate the business safely and in a sustainable manner • Maximise high margin production from existing operations • Determine best means to cost-effectively increase production • Support pricing momentum as market conditions allow • Invest in product and
Slide 23: Supplementary Slides
For personal use only Supplementary Slides
Slide 24: Key Physical & Financial Parameters: 2011 Physical Trends
Key Physical & Financial Parameters 2011 Physical Trends For personal use only 2010 2011 2012 Commentary Guidance Production (kt) Zircon 413 ~500 Expected to be ~500kt 1 Rutile 250 ~250 Expected lower production (~200kt) due to transition to new deposits at WRP, following completion of mining at Dou
Slide 25: Key Physical & Financial Parameters: 2011 Financial Trends
Key Physical & Financial Parameters 2011 Financial Trends For personal use only 2010 2011 2012 Commentary Guidance Cash Costs A$m Production costs 544 ~540 Expected to be lower, but dependent on mine move and kiln operation, and cost inflation Z/R/SR unit costs 538 ~560 Expected to be lower, depende
Slide 26: Mineral Sands Results
Mineral Sands Results For personal use only $m 1H 2010 2H 2010 2010 2009 % change pcp Mineral Sands Revenue (pre hedging) 378.6 495.8 874.4 576.0 51.8 EBITDA Eucla / Perth Basins 46.2 73.7 119.9 47.9 150.3 Murray Basin 39.0 74.9 113.9 13.2 762.9 US Operations 20.2 20.0 40.2 30.7 30.9 Exploration and
Slide 27: 1st and 2nd Half 2010 EBITDA
1st and 2nd Half 2010 EBITDA For personal use only $m 1H 2010 2H 2010 2010 Mineral Sands Revenue (pre hedging) 378.6 495.8 874.4 EBITDA Mineral Sands 95.3 154.9 250.2 Currency Hedging and Foreign Exchange (1.4) 10.3 8.9 Mining Area C 35.5 40.4 75.9 Corporate and Other (14.0) (16.3) (30.3) Total EBIT
Slide 28: 2010 Cash Flow and Net Debt
2010 Cash Flow and Net Debt For personal use only $m 1H 2010 2H 2010 2010 2009 % change pcp Opening Net Debt (382.1) (439.0) (382.1) (215.7) (77.1) Operating Cash Flow 43.9 119.7 163.6 86.5 89.1 MAC Royalty 19.8 44.1 63.9 55.2 15.8 Exploration (7.6) (10.3) (17.9) (20.0) 10.5 Net Interest (12.3) (17.
Slide 29: Cash Costs of Final Products Produced
Cash Costs of Final Products Produced 2010 vs 2009 For personal use only 2010 2009 % change Z/R/SR1 Production (kt) 1,010.5 809.5 24.8 Saleable Ilmenite (kt) 469.0 342.1 37.1 Final Product Produced (kt) 1,479.5 1,151.6 28.5 Total Cash Cost (A$m) 543.8 453.6 (19.9) Cash Cost / tonne of High Value Cor
Slide 30: Debt Maturity Profile
Debt Maturity Profile For personal use only A$m DEBT MATURITY PROFILE (as at 31 December 2010) 500 400 300 200 100 0 2011 2012 2013 2014 2015 Syndicated Facility Drawn USPP Notes Working Capital Facility Undrawn Syndicated Facility Undrawn 30
Slide 31: Capital and Exploration Expenditure (Cash)
Capital and Exploration Expenditure (Cash) For personal use only A$m 2010 2009 % change Capital Expenditure (117.2) (521.6) 77.5 Exploration (17.9) (20.0) 10.5 Total (135.1) (541.6) 75.1 31
Slide 32: 2010 Production Volumes
2010 Production Volumes For personal use only (kt) 2010 2009 % change Zircon 412.9 263.1 56.9 Rutile 250.1 141.4 76.9 Synthetic Rutile 347.5 405.0 (14.2) Ilmenite - Saleable 469.0 342.1 37.1 Ilmenite - Upgradeable 215.9 496.7 (56.5) 32
Slide 33: Eucla / Perth Basins 2010 vs 2009
Eucla / Perth Basins 2010 vs 2009 For personal use only Financials 2010 2009 % change Sales Revenue $m 468.7 385.6 21.6 Total Cash Production Costs $m (306.6) (316.9) 3.2 Depreciation and Amortisation $m (86.1) (127.2) 32.3 Inventory Movements $m (9.5) 23.6 n/a Cost of Goods Sold $m (402.2) (420.5)
Slide 34: Murray Basin 2010 vs 2009
Murray Basin 2010 vs 2009 For personal use only Financials 2010 2009 % change Sales Revenue $m 281.5 124.8 125.6 Total Cash Production Costs $m (183.9) (87.6) (109.9) Depreciation and Amortisation $m (113.0) (31.7) (256.5) Inventory Movements $m 32.3 (5.7) n/a Cost of Goods Sold $m (264.6) (125.0) (
Slide 35: US Operations 2010 vs 2009
US Operations 2010 vs 2009 For personal use only Financials 2010 2009 % change Sales Revenue $m 124.3 65.6 89.5 Total Cash Production Costs $m (53.3) (49.1) (8.5) Depreciation and Amortisation $m (17.0) (17.3) 1.7 Inventory Movements $m (25.7) 15.5 n/a Cost of Goods Sold $m (96.0) (50.9) (88.6) 1 Ot
Slide 36: China Zircon Imports
China Zircon Imports Iluka Analysis of Chinese Import Data – to end December 2010 For personal use only Cumulative Year To Date Monthly kt kt 700 80 600 70 60 500 50 400 40 300 30 200 20 100 10 0 0 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-
Slide 37: Iluka Resources Limited
For personal use only Iluka Resources Limited For further information, contact: Robert Porter General Manager, Investor Relations robert.porter@iluka.com +61 3 9600 0807 / +61 (0) 407 391 829 www.iluka.com