Slide 1: FY22 Full Year Results
FY22 Full Year Results 29 AUGUST 2022
Slide 2: Forward Looking Statements Disclaimer
Forward Looking Statements Disclaimer FORTESCUE | FY22 FULL YEAR RESULTS | 2
Slide 3: We are Fortescue
We are Fortescue FORTESCUE | FY22 FULL YEAR RESULTS | 3
Slide 4: Global green energy and resources company
Global green energy and resources company FORTESCUE | FY22 FULL YEAR RESULTS | 4
Slide 5: Safety and unique culture
Safety and unique culture Total Recordable Injury Frequency Rate 7.6 1.8 TRIFR 10% 95% 6.0 5.1 4.3 3.7 2.9 2.8 2.4 Total Recordable Improvement Workforce 2.0 1.8 Injury Frequency Rate compared to participation in annual at 30 June 2022 30 June 2021 Safety, Excellence and Culture Survey FY13 FY14 FY1
Slide 6: FY22 iron ore production highlights
FY22 iron ore production highlights Outstanding operating 189.0mt performance delivers record annual shipments Record annual shipments – 4% increase on FY21 US$15.91 /wmt Industry leading C1 cost US$100 /dmt Average revenue 72% Average revenue realisation FORTESCUE | FY22 FULL YEAR RESULTS | 6
Slide 7: FY22 financial highlights
FY22 financial highlights US$17.4 US$10.6 US$6.2 bn bn bn Revenue Underlying EBITDA Net profit after tax 61% US$63 /dmt US$2.01 Underlying EBITDA margin Underlying EBITDA Earnings per share (A$2.77) per tonne1 1Excludes Fortescue Future Industries costs FORTESCUE | FY22 FULL YEAR RESULTS | 7
Slide 8: FY22 financial highlights
FY22 financial highlights US$6.6 US$3.6 US$5.2 bn bn bn Net operating cashflow Free cash flow Cash on hand US$6.1 US$0.9 26% bn bn Gross debt Net debt Gross gearing FORTESCUE | FY22 FULL YEAR RESULTS | 8
Slide 9: Shareholder returns
Shareholder returns Delivering returns to our shareholders A$1.21 per share Fully franked final dividend A$2.07 per share FY22 total dividends 75% pay out ratio A$6.4bn Value of FY22 dividends FORTESCUE | FY22 FULL YEAR RESULTS | 9
Slide 10: FY23 guidance
FY23 guidance 187 – 192mt US$2.7 – US$3.1 bn Iron ore shipments Capital expenditure, excluding Fortescue Future Industries (FFI) US$18.00 – US$18.75 US$600 – US$700m /wmt C1 cost for hematite FFI anticipated expenditure, inclusive of US$100m of capital expenditure and US$500 - US$600m of operating e
Slide 11: Sustainability
Sustainability FORTESCUE | FY22 FULL YEAR RESULTS | 11
Slide 12: Our approach to sustainability aligned with the UNSDGs
Our approach to sustainability is aligned with the UNSDGs UNSDGs: United Nations Sustainable Development Goals FORTESCUE | FY22 FULL YEAR RESULTS | 12
Slide 13: A safe and inclusive workplace
A safe and inclusive workplace Zero tolerance to bullying, harassment Strong and unique culture or intimidation Record annual shipments, exceeding full year guidance Workplace Integrity Review Engaging with Fortescue workers and contractors Speak Up Empowering our team to report inappropriate behavi
Slide 14: Building sustainable communities
Building sustainable communities A focus on safety and ensuring the communities in which we operate benefit from our success 1.8 TRIFR A$27.6bn 15% Aboriginal 10% improvement Total global economic Employment rate across from 2.0 in FY21 contribution Pilbara operations FORTESCUE | FY22 FULL YEAR RESU
Slide 15: Building a diverse workplace
Building a diverse workplace Championing gender diversity and building a workplace that is inclusive of all people 50% 23% 27% Female representation Female employment Senior leadership roles on Board of Directors as held by women at 30 June 2022 FORTESCUE | FY22 FULL YEAR RESULTS | 15
Slide 16: Safeguarding natural systems
Safeguarding natural systems Minimising the impact of our operations on the environment Zero Significant environment incidents 99% water use efficiency at Cloudbreak and Christmas Creek mine sites Building circularity Reducing waste generation through prevention, reduction, recycling and reuse FORTE
Slide 17: Creating opportunities through training, employment and business development
Creating opportunities through training, employment and business development >A$4bn in contracts awarded to Aboriginal businesses and joint ventures through Billion Opportunities since 2011 1,100 Aboriginal people employed since 2006 through VTEC Royal Flying Doctor Service partnering with the RFDS
Slide 18: Industry leader in addressing climate change
Industry leader in addressing Carbon neutrality by 2030 climate change Decarbonising our operations to run on green energy Green fleet development Investing in renewable energy technologies to decarbonise our mining fleet Stationary energy Energy infrastructure supporting incorporation of large scal
Slide 19: Acquired Williams Advanced Engineering enabling decarbonisation
Acquired Williams Advanced Engineering Enabling Fortescue’s decarbonisation Critical technology and expertise in high- performance battery systems and electrification Demonstrated track record of success in advanced engineering across the premium automotive and motorsports sectors Vertically integra
Slide 20: Leading the world effort to decarbonise heavy industry
Leading the world effort to decarbonise heavy industry Green mining haul trucks o Partnering with Liebherr o First green haul truck operational at site by 2025 Infinity Train o World’s first zero emission regenerating battery electric iron ore train Battery electric locomotives o First locomotive fr
Slide 21: Decarbonisation progress
Decarbonisation progress Focusing on emissions reduction across the value chain Green iron o Evaluating production of green iron and the reduction of emissions from iron and steelmaking Shipping o Developing ammonia powered marine engines o Working to supply green ammonia as a fuel to the shipping m
Slide 22: Growing global demand for renewable energy
Growing global demand for renewable energy Progressing committed offtake agreements o Across Europe, Asia and North America Partnering with E.ON o Aiming to deliver up to 5mtpa of green hydrogen to Europe by 2030 FORTESCUE | FY22 FULL YEAR RESULTS | 22
Slide 23: Turning Queensland into a renewable green energy hub
Turning Queensland into a renewable green energy hub Green Energy Manufacturing Centre Gladstone o Australia’s first multi-gigawatt-scale electrolyser manufacturing facility, production in 2023 Gibson Island Partnering with Incitec Pivot Limited o Conversion of existing ammonia production facility t
Slide 24: FFI capital allocation
FFI capital allocation US$600 – US$700m FY23 anticipated expenditure Inclusive of US$100m of capital expenditure and US$500 – US$600m of operating expenditure 10% of NPAT Capital allocation US$1.1bn Capital commitment unutilised by FFI inclusive of balance at 30 June 2022 and 10 per cent allocation
Slide 25: Integrated operations and marketing
Integrated operations and marketing FORTESCUE | FY22 FULL YEAR RESULTS | 25
Slide 26: Integrated mine to market infrastructure
Integrated mine to market infrastructure FORTESCUE | FY22 FULL YEAR RESULTS | 26
Slide 27: Value chain
Value chain FORTESCUE | FY22 FULL YEAR RESULTS | 27
Slide 28: Marketing strategy
Marketing strategy Direct engagement Customers and stakeholders Flexible and innovative Product and logistics offering Long term relationships Built on mutual respect and trust Product suite Aligns with the needs of the market FORTESCUE | FY22 FULL YEAR RESULTS | 28
Slide 29: Global macroeconomic uncertainty, supportive China policy
Global macroeconomic uncertainty Supportive China policy Increasing measures to bolster demand Global growth challenges Inflation and energy issues impacting steel demand Iron ore supply Continued challenges in non-traditional supply Strong demand for Fortescue’s products Low stocks at port in China
Slide 30: Realisations
Realisations FY22 average revenue of US$100/dmt, 72% of the Platts 62% CFR Index Average price realisation of the Platts 62% CFR Index (%) 89 91 86 86 84 82 78 73 68 70 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Platts 62% CFR Index (US$/dmt) 250 200 150 100 50 0
Slide 31: Growth and development
Growth and development FORTESCUE | FY22 FULL YEAR RESULTS | 31
Slide 32: Iron Bridge
Iron Bridge Strategic investment providing an enhanced product range to meet customer demand US$3.6 – US$3.8bn Capital estimate 67% Fe High grade magnetite concentrate 22mtpa First production in March 2023 quarter FORTESCUE | FY22 FULL YEAR RESULTS | 32
Slide 33: Iron Bridge 2021
Iron Bridge 2021 FORTESCUE | FY22 FULL YEAR RESULTS | 33
Slide 34: Iron Bridge 2022
Iron Bridge 2022 FORTESCUE | FY22 FULL YEAR RESULTS | 34
Slide 35: Exploration
Exploration Pilbara o Extensive iron ore tenement footprint o Focus on programs at Nyidinghu and Mindy South Australia o Target generation for copper-gold in WA, NSW and SA o Drilling underway in NSW and SA International o Drilling programs in Argentina and Kazakhstan o Exploration in Peru, Chile, B
Slide 36: Global opportunities in iron ore: Republic of Gabon
Global opportunities in iron ore Republic of Gabon Attractive jurisdiction Africa o Politically and economically stable o Sparsely populated o High GDP per capita relative to African countries Gabon Investment friendly o Regulatory framework for foreign investment o Credit rating (Fitch): B-; Outloo
Slide 37: Belinga Iron Ore Project
Belinga Iron Ore Project One of the world’s largest undeveloped high grade hematite deposits High grade deposit o Very large scale, high Fe grade deposit o Limited modern exploration activity o Geological similarities to the Simandou deposit Exploration Convention o Joint venture between Fortescue (
Slide 38: FY22 Results
FY22 Results FORTESCUE | FY22 FULL YEAR RESULTS | 38
Slide 39: Revenue and earnings
Revenue and earnings Second highest in Company’s history Revenue (US$m) Underlying EBITDA (US$m) NPAT (US$m) 16,375 22,284 10,295 17,390 10,561 12,820 6,197 8,375 9,965 4,735 6,047 6,887 3,187 3,182 878 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 FORTESCUE | FY22 FULL
Slide 40: Underlying EBITDA
Underlying EBITDA Strong prices, volume growth and disciplined cost control FY21 NPAT to FY22 NPAT reconciliation (US$m) Underlying EBITDA margin (%) 73 65 61 61 46 FY18 FY19 FY20 FY21 FY22 FORTESCUE | FY22 FULL YEAR RESULTS | 40
Slide 41: Price and margins
Price and margins Strong margins through all market cycles Prices and Underlying EBITDA margin (US$/dmt) *Excludes FFI costs FORTESCUE | FY22 FULL YEAR RESULTS | 41
Slide 42: Cash generation
Cash generation Strong operating performance and disciplined capital investment Net cash from operations (US$m) Capital expenditure (US$m) Free cash flow (US$m) 12,594 3,633 8,961 3,074 6,415 6,646 1,966 4,449 4,373 3,572 3,328 1,045 897 1,601 704 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 FY
Slide 43: Capital expenditure
Capital expenditure Reinvesting in business and growth FY22 capital expenditure (US$m) FY23 capital expenditure guidance (US$m) 210 700-800 Excludes FFI capital of US$2.7 - US$3.0bn 1,431 Excludes FFI capital US$130m 1,109 US$3.1bn 1,400 guidance of US$100m 100-200 1,600 200 300 194 Sustaining and d
Slide 44: Robust balance sheet
Robust balance sheet Credit metrics below target range, with future capacity Gross debt (US$m) Debt maturity profile excluding leases (US$m) 6,103 Syndicated Term Loan Senior Unsecured Notes Green Senior Unsecured Notes 1,500 5,113 3,975 3,952 4,252 1,000 750 800 700 600 FY18 FY19 FY20 FY21 FY22 FY2
Slide 45: Disciplined capital management
Disciplined capital management Aggregate earnings and cash flows FY14 - FY22 1Includes share buyback FORTESCUE | FY22 FULL YEAR RESULTS | 45
Slide 46: Return on capital
Return on capital Profitable and capital efficient Return on equity (%) Return on capital employed1 (%) 66 66 40 35 37 36 31 29 11 9 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 1ROCE is calculated as earnings before interest and tax divided by average capital (total assets minus current liabil
Slide 47: Delivering returns to our shareholders
Delivering returns to our Fully franked dividend of A$1.21 per share, shareholders representing a 75% payout of FY22 NPAT Dividends (A$/share) and payout ratio (%) 4.50 78% 80% 85% 77% 75% 4.00 75% 3.58 3.50 62% 65% 52% 3.00 55% 2.50 38% 45% 36% 2.07 2.00 1.76 35% 1.50 21% 21% 25% 17% 1.14 16% 1.00
Slide 48: We are Fortescue
We are Fortescue FORTESCUE | FY22 FULL YEAR RESULTS | 48
Slide 49: Fortescue
FORTESCUE Fortescue -orure INDUSTRIES ¥ We are Fortescue = fortescue.com