Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — CLSA 2017
29 slides from Fortescue's conference presentation, Sep 12, 2017
Slide 1: CLSA 2017
For personal use only CLSA 2017
Slide 2: Forward looking statements
Forward looking statements For personal use only Disclaimer Important Notice Additional Information The purpose of this presentation is to provide general information about This presentation should be read in conjunction with the Annual Report at 30 Fortescue Metals Group Limited ("Fortescue"). It i
Slide 3: Building a world class company
Building a world class company MG ce Safety focus: engagement, empowerment, leadership — i — to China
Slide 4: Generating shareholder value
Generating shareholder value Focus on safety, productivity and efficiency For personal use only Market strategy Operational performance Long life resources Capital discipline Shareholder returns 4
Slide 5: Our Vision: The safest, lowest cost, most profitable iron ore producer
Our Vision: The safest, lowest cost, most profitable iron ore producer Safety Empowerment Family Frugality Stretch targets Ww Fortescue tam couageand Ps Integrity Enthusiasm determination | Senerating ideas Humility The New Force in Iron Ore
Slide 6: Delivering on our targets in FY17
Delivering on our targets in FY17 For personal use only Sustainable cost reduction and consistent production performance TRIFR 2.9 170.4mt C1 cost 33% reduction Shipped $12.82/wmt 17% reduction A$0.25 21% US$2.7bn Final dividend Net gearing Debt repaid 6
Slide 7: Sustainable cost improvements
Sustainable cost improvements For personal use only Initiatives delivering long term low cost outcomes US$/wmt Structural improvements 48 44 Solomon + Blending + Processing 34 Productivity and Efficiency 27 Utilisation, Recoveries, Maintenance 15 12.82 11-12 Innovation and Technology Autonomy, Gas,
Slide 8: Maintaining position on the cost curve
Maintaining position on the cost curve For personal use only China's Iron Ore Supply CFR Costs (including royalties & ocean freight) 2012 2017 Source: Metalytics – March 2017 8
Slide 9: Financial performance
For personal use only Financial performance
Slide 10: FY17 financial outcomes
FY17 financial outcomes For personal use only Operational performance delivering financial results US$2.1bn US$1.8bn US$3.5bn NPAT Cash on hand Free cashflows US$0.67 US$525m A$0.45 113% increase in Revolving credit Total FY17 dividends earnings per share facility 52% pay-out 10
Slide 11: Debt maturity
Debt maturity For personal use only First maturity in 2022 and a US$525 million revolver facility US$m 3,000 2,500 2,000 1,500 2,160 1,000 500 750 750 0 CY2017 CY2018 CY2019 CY2020 CY2021 CY2022 CY2023 CY2024 Senior Secured Note Senior Unsecured Notes Refer to attached glossary for definition of non
Slide 12: Fortescue: The New Force in Iron Ore
Fortescue The New Force in Iron Ore
Slide 13: Core supplier to Asia
Core supplier to Asia For personal use only Well established market share of imported iron ore to China Total 2016 global steel production 1,629mt Low impurity 58% Fe average Competitive Large diverse value in use customer base 541 808 Responsive Proximity 79 to market needs to high growth 96 105 re
Slide 14: Developing and emerging Asia
Developing and emerging Asia For personal use only Asian economies generating two thirds of global growth Source: IMFWorld Source: IMF WorldEconomic Economic Database Database April Oct 20162017 14
Slide 15: Iron ore inventory levels
For personal use only Mt 20 40 60 80 0 100 120 140 160 180 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 Iron ore inventory levels May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-1
Slide 16: Innovation
For personal use only Innovation
Slide 17: Generating ideas for future innovation
Generating ideas for future innovation For personal use only People, processes and techniques are all catalysts for innovation • Exploration techniques • Integrated Operations Centre • Mine planning and optimisation • Harnessing automation • Low cost, relocatable conveyor • Fortescue Ore Carriers 17
Slide 18: World class autonomous haulage operation
World class autonomous haulage operation For personal use only Building on our success and expanding to the Chichester Hub Improved safety + 56 Operating at Solomon productivity +12 to be converted Chichester Expansion 100 trucks 390mt Material moved at over 3 years Solomon 18
Slide 19: Reserves and resources
For personal use only Reserves and resources
Slide 20: Resource portfolio supports long mine life
Resource portfolio supports long mine life For personal use only Largest Pilbara tenement footprint: 13bt tonnes Hematite, 7.9bn tonnes Magnetite 20
Slide 21: Active exploration
Active exploration For personal use only Developing low cost growth options Targeting copper and gold New South Wales ~2,000km2 tenure South Australia ~6,000km2 tenure Ecuador 32 concessions 21
Slide 22: Building strong communities
For personal use only Building strong communities
Slide 23: Diverse workforce representing our communities
Diverse workforce representing our communities For personal use only Creating opportunities through training, employment and business development 23
Slide 24: Focussed strategy
For personal use only Focussed strategy
Slide 25: FY18 guidance
FY18 guidance For personal use only Sustainable performance driven by innovation 170mt US$11-12/wmt 75-80% shipped C1 cost Revenue realisation US$3/wmt Depreciation Dividend policy Sustaining capital US$7.40/wmt 50-80% pay-out of NPAT 25
Slide 26: Key strategic focus
Key strategic focus For personal use only Ensuring our communities benefit from the growth and development of Fortescue Debt repayment and capital flexibility Long term sustainability Returns to shareholders Low cost growth options 26
Slide 27: Sustainable low cost producer
For personal use only Sustainable World class Low cost producer Assets and people Customer focus Unique culture Reliable and competitive Drives performance 27
Slide 28: For personal use only
For personal use only www.fmgl.com.au @FortescueNews Proudly supporting:
Slide 29: Glossary
Glossary For personal use only C1: Operating costs of mining, processing, rail and Underlying EBITDA: Earnings before interest, tax, depreciation and port on a per tonne basis, including allocation of amortisation, exploration, development and other direct administration charges and production expen