Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — China Iron Ore Conference (January 2018)
24 slides from Fortescue's conference presentation, Jan 31, 2018
Slide 1: China Iron Ore Conference
For personal use only China Iron Ore Conference
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 For personal use only Safety focus: engagement, empowerment and innovation Shipped over Core supplier to China 965mt Low cost 170mt producer Production rate
Slide 4: Our Vision: The safest, lowest cost, most profitable iron ore producer
Our Vision: The safest, lowest cost, most profitable iron ore producer Safety Family Empowerment Frugality Stretch targets Ww Fortescue wm orageand F Integrity Enthusiasm determination Generating ideas Humility The New Force in Iron Ore
Slide 5: 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 5
Slide 6: Operating and financial performance
For personal use only Operating and financial performance
Slide 7: FY18 Q2 on track
FY18 Q2 on track For personal use only Operational performance delivering financial results and cashflows Safety 3.1 TRIFR Production 40.5mt Shipped for the quarter C1 Cost $12.08/wmt On target to US$11-12 7
Slide 8: Sustainable cost improvements
Sustainable cost improvements For personal use only Initiatives delivering long term low cost outcomes US$/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 9: 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 2018 (Projected) Source: Metalytics – October 2017
Slide 10: 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 11: Innovation
For personal use only Innovation
Slide 12: 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 12
Slide 13: 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 500mt Material moved at over 3 years Solomon 13
Slide 14: Fortescue: The New Force in Iron Ore
Fortescue The New Force in Iron Ore
Slide 15: 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 16: Developing and emerging Asia
Developing and emerging Asia For personal use only Asian economies generating two thirds of global growth Source: IMF Source: IMFWorld WorldEconomic EconomicDatabase DatabaseOct April 20162017 16
Slide 17: 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 Iron ore inventory levels Mar-13 May-13 Jul-13 Iron ore port inventory at record levels Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14
Slide 18: Building strong communities
For personal use only Building strong communities
Slide 19: Diverse workforce representing our communities
Diverse workforce representing our communities For personal use only Creating opportunities through training, employment and business development 19
Slide 20: Focussed strategy
For personal use only Focussed strategy
Slide 21: FY18 guidance
FY18 guidance For personal use only Sustainable performance driven by innovation 170mt US$11-12/wmt 70-75% shipped C1 cost Price realisation US$3/wmt Depreciation Dividend policy Sustaining capital US$7.40/wmt 50-80% pay-out of NPAT 21
Slide 22: 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 Low cost growth options Returns to shareholders 22
Slide 23: For personal use only
For personal use only Sustainable World class Low cost producer Assets and people Customer focus Unique culture Reliable and competitive Drives performance 23
Slide 24: For personal use only
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