Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — UBS Australasia Conference 2015
23 slides from Whitehaven Coal's conference presentation, Nov 16, 2015
Slide 1: Whitehaven Coal Limited - UBS Australasia Conference
For personal use only Whitehaven Coal Limited UBS AUSTRALASIA CONFERENCE SYDNEY, AUSTRALIA 16 AND 17 NOVEMBER 2015
Slide 2: Disclosure
Disclosure For personal use only 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 PROJEC
Slide 3: Agenda
Agenda For personal use only About Whitehaven Asian growth markets Coal quality Operational performance Growth profile Valuations Conclusion 3 // UBS CONFERENCE PRESENTATION
Slide 4: Our goal
Our goal For personal use only To become Australia’s leading independent coal company 4 // UBS CONFERENCE PRESENTATION
Slide 5: About Whitehaven Coal
About Whitehaven Coal For personal use only LOW COST MINES PRODUCING HIGH QUALITY COAL ASX Code: WHC Shareholders – 1,026 million shares on issue with 6,829 – Farallon 16.6% shareholders – AMCI Group 14.8% – Market Cap $A1.1 billion – Trading 80 million shares per month – Eastspring 10.1% – Manning
Slide 6: Where we operate
Where we operate For personal use only LOW COST PRODUCER OF HIGH QUALITY METALLURGICAL AND THERMAL COAL Maules Creek (75%) Tier One Mine – Reserves: ~ 30 years, Permitted & Planned 13Mtpa – SSCC, PCI and high energy thermal Narrabri (70%) Tier One Mine – Reserves: ~ 25 years, Permitted 8Mtpa, Planne
Slide 7: Where we expect to sell our coal
Where we expect to sell our coal For personal use only COAL SOLD INTO THE PREMIUM ASIAN MARKETS Thermal Coal Sales Targets FY2019 – By FY2019 Whitehaven expects sales to 10% Japan increase to about 26Mt on a 100% basis 15% Korea comprising 9Mt of metallurgical coal and 17Mt 50% SE Asia thermal coal
Slide 8: Why we sell into these markets
Why we sell into these markets For personal use only STRONG LONG TERM GROWTH IN SE ASIAN COUNTRIES – Every Southeast Asian country, as well as our IEA Forecast Coal Fired Electricity Capacity (GW) traditional markets of Japan and Korea, is and Coal Required (Mt) adding electricity generating capacit
Slide 9: Why SE Asian countries use coal
Why SE Asian countries use coal For personal use only COAL IS A LOW COST SOURCE OF ELECTRICITY FOR THE REGION Levelised Cost of Electricity SE Asia – Improvement in living standards - (US$/MWh) countries are adding electricity 140 generating capacity so that an 120 estimated 120 million people in th
Slide 10: Low emission capacity is being added
Low emission capacity is being added For personal use only SE ASIAN NATIONS ALONG WITH JAPAN, KOREA AND TAIWAN ARE ADDING LOW EMISSION CAPACITY Forecast Installed Coal Fired Generating Capacity (GW) – Malaysia recently completed the construction 250 of its first ultra super critical power station (1
Slide 11: High quality coal underpins Asian emission reductions
High quality coal underpins Asian emission reductions For personal use only efficiency 35% CO2 =100 5.39 Mt – The efficiency of a power station drives its carbon emissions subcritical efficiency 40% CO2 =87 4.70 Mt – Utilising higher efficiency USC or AUSC technology reduces carbon supercritical emi
Slide 12: Whitehaven is redefining coal quality in the Asian market
Whitehaven is redefining coal quality in the Asian market For personal use only Thermal Coal - Ash vs Sulphur Ash (% a.d,) High Quality Coal 20.0 18.0 16.0 14.0 12.0 10.0 8.0 0.20 – Whitehaven produces some of 0.30 Whitehaven the highest quality coals sold in the Asian region 0.40 Premium Hunter 0.5
Slide 13: Case study - Narrabri
Case study - Narrabri For personal use only IF JAPAN’S COAL FIRED GENERATING EFFICIENCY WAS ADOPTED ELSEWHERE2, CARBON DIOXIDE EMISSIONS WOULD BE REDUCED BY 1.5BT/Y1 – In FY2015, 39% of Whitehaven’s thermal coal was sold in Japan, to increase as Maules Creek coal is sold into Japan – The state of th
Slide 14: Safety performance
Safety performance For personal use only IMPROVING SAFETY OUTCOMES LEAD TO BETTER OPERATING PERFORMANCE Whitehaven and NSW Coal Industry TRIFR 25 – Introduction of Whitehaven’s “Safehaven Rules” in early 2014 is 20 delivering improved safety performance 15 10 – The TRIFR fell by 35% in FY2015 to Saf
Slide 15: Whitehaven costs have fallen
Whitehaven costs have fallen For personal use only DELIVERING SUSTAINABLE COST REDUCTIONS OVER THREE YEARS ASP, Costs and Margin (A$/t) – Unit costs down 24% from H1 FY2013 $85 to A$60/t in H2 FY2015 $80 – Whitehaven increased margins in $75 second half of FY2015 to A$15/t from $70 A$10/t in the fir
Slide 16: Increasing productivity
Increasing productivity For personal use only NARRABRI AND MAULES CREEK SET TO INCREASE OVERALL PRODUCTIVITY Narrabri Productivity (t/m/y) 30,000 – Average productivity as measured by saleable production per employee per year in NSW open 20,000 cut and underground coal mines at the end of June 2015
Slide 17: How have gains been achieved
How have gains been achieved For personal use only WHITEHAVEN HAS MADE MANY SUSTAINABLE CHANGES TO IMPROVE THE BUSINESS – Post the 2012 Aston merger Whitehaven refreshed its three most senior layers of management – Aligned compensation with safety, financial and operational outcomes – Restructured a
Slide 18: Growth path fully funded
Growth path fully funded For personal use only ONGOING GROWTH FROM LOW COST HIGH MARGIN COAL Saleable Coal Production by Mine (Mt) 30.0 – Strong production growth to continue 25.0 Forecast as Maules Creek ramps up to full production in FY2019 20.0 – Saleable coal production for FY2016 15.0 likely to
Slide 19: Valuation comparison
Valuation comparison For personal use only RECENT TRANSACTION PRICED MUCH HIGHER THAN EQUITY MARKET VALUATIONS Bengalla Whitehaven Narrabri Maules Creek Maules Creek 100% Equity 100% 100% Ramped Marketable Reserves (Mt) 217 451 204 329 329 2016 Production (Mt) 8.6 14.5 7.2 6.9 12.0 2019 Production (
Slide 20: Key takeaways
Key takeaways For personal use only WHITEHAVEN IS A LOW COST HIGH GROWTH, HIGH QUALITY COAL PRODUCER New management team in place to drive business Marketing and logistics team enhanced to facilitate growth in sales into the premium Asian markets Costs will continue to decline Volumes and pr
Slide 21: Thank you
For personal use only THANK YOU www.whitehavencoal.com.au
Slide 22: Appendices
For personal use only Appendices 22 //UBS CONFERENCE PRESENTATION
Slide 23: Reserves
Reserves For personal use only WHITEHAVEN COAL LIMITED - COAL RESERVES - AUGUST 2015 Recoverable Reserves Marketable Reserves Competent Report Tenement Proved Probable Total Proved Probable Total Person Date Vickery Opencut CL316/EL4699/EL7407 – 200 200 – 178 178 1 Mar-15 Rocglen Opencut M L1620 3.8