Slide 1: FY2016 results information pack
FY2016 results information pack 18 August 2016
Slide 2: Agenda
Agenda 1 FY16 highlights 2 MRL background and business model overview 3 Operational performance 4 Financial performance 5 Innovation and growth 6 FY17 Outlook 2
Slide 3: Result highlights
Result highlights • Revenue of A$1.2 billion in line with the prior corresponding period (‘pcp’). Lower transactional revenue (EPC) in Mining FY16 Infrastructure Services and lower global iron ore prices, offset by an increase in export volumes in the Commodity business Financials • Normalised EBITD
Slide 4: Result highlights
Result highlights • Wodgina site acquired in FY16 and represents a significant Build-Own-Operate and profit share opportunity for MRL as a Innovation & regional processing facility. Site has potential for significant lithium operations growth • Continue to progress the development of MRL’s own LNG a
Slide 5: MRL background and business model
MRL background and business model MINING SERVICES BUSINESS 5
Slide 6: MRL overview
MRL overview Innovative mining Founded in 1993, Mineral Resources (MRL) is a leading and highly innovative full-service provider of mining infrastructure services in infrastructure Australia services provider MRL provides innovative and low cost Pit to Port solutions across PHOTO Unique value the mi
Slide 7: Mining Infrastructure Services
Mining Infrastructure Services MRL delivers integrated infrastructure services across the mining supply chain Mining supply chain Plant / Port Sales Site services Mining Transport Processing services • Remote, mine-site • Mine scheduling • Crushing and mineral • Road & rail logistics • Port logistic
Slide 8: Unique value proposition
Unique value proposition “Partner with selected clients to deliver innovative high quality and cost efficient mineral processing and mining infrastructure Pit to Port solutions” • Proven track record of innovative designs for crushing, screening, mineral Global leader in design and technology proces
Slide 9: Profit share model
Profit share model MRL is uniquely positioned to benefit from profit share partnerships MRL’s profit share model - stages in the cycle Benefits of profit share model • MRL targets undeveloped resource assets Acquire / joint that will materially benefit from MRL’s venture mining infrastructure soluti
Slide 10: Case Study – Mt Marion
Case Study – Mt Marion Track record of investing in projects with strong returns on capital employed • In 2015, MRL agreed to proceed with project to produce 280ktpa of +4-6% lithium spodumene concentrate and provide complete mine-to-port solution on a Total expected AU$70m Build-Own-Operate (BOO) b
Slide 11: Operational performance
Operational performance Train loading circuit for the Carina operation - Yilgarn region MRL locomotives in action - Yilgran region Western Australia 11
Slide 12: Operational highlights
Operational highlights 1H 1H Commodity Exports (Mt) 14.0 12.1 12.0 10.4 10.6 10.0 8.0 1H 1H 1H 1H 5.6 6.0 4.0 4.0 2.7 2.0 0.0 FY11 FY12 FY13 FY14 FY15 FY16 12
Slide 13: Mining Infrastructure Services
Mining Infrastructure Services MRL is currently operating across 26 sites and 5 different commodity types Annuity style earnings Transactional earnings • Increased equivalent crushing capacity by 11% pcp in • Progressed works on Nammuldi Below Water Table FY16 Expansion Stage 2 (EPC construction con
Slide 14: Commodity Business - Projects
Commodity Business - Projects Key statistics for Mining Operations (with profit share) (by commodity) Iron Ore Lithium Manganese Project name Iron Valley Yilgarn Mt Marion Mesa % of product profit 100%1 100% 43.1%2 81.5% Annual production 7Mt 5-6Mt 400Kt(4-6% Li20) On hold Annual potential 16Mt tonn
Slide 15: Commodity Business
Commodity Business Key per tonne statistics for iron ore operations with profit share • Mining business currently in iron ore, lithium and manganese A$/wet metric 1H 14 2H14 1H 15 2H 15 1H 16 2H 16 • Future supply chain initiatives and efficiencies continue tonne (WMT) to be evaluated and implemente
Slide 16: Financial performance
Financial performance MINING SERVICES BUSINESS MRL’s Carina operations in the Yilgarn 16
Slide 17: Financial highlights
Financial highlights MRL has a track record of improving its financial performance and delivering returns for shareholders over the long term 17
Slide 18: Profit and loss statement
Profit and loss statement Stable FY16 earnings and improved margins despite difficult commodity price environment Normalised Profit & Loss • Revenue of A$1.2 billion in line with the pcp reflecting: – Lower transaction revenue (EPC) for external clients in Mining A$ million FY15 FY16 Infrastructure
Slide 19: Cash flow statement
Cash flow statement Cash Flow • Cash and cash equivalents increased by A$198m in the year. Net Cash of A$ million FY15 FY16 A$188m increased by A$70m Normalised EBITDA 283.0 286.1 • Substantial working capital improvements delivered Movement in working capital (ex. Construction) (109.0) 62.2 ‒ timin
Slide 20: Statement of financial position
Statement of financial position Significant balance sheet flexibility to grow the business in the future • Net cash (cash and cash equivalents less borrowings) increased A$ million 30-Jun-15 30-Jun-16 A$70m in the year to A$188m Current assets Cash and cash equivalents 210 407 • A$400m 3-year syndic
Slide 21: Innovation and growth
Innovation and growth MINING SERVICES BUSINESS Nammuldi Below Water Table process plant - Pilbara region 21
Slide 22: Priorities for innovation and growth
Priorities for innovation and growth Multiple drivers of organic growth 1 Growth of existing business • Management expects to grow build own operate contracts with two additional plants to be secured in the next 6 to 12 months • Design, build and transfer (EPC) work declining • Wodgina site acquired
Slide 23: LNG and gas power strategy
LNG and gas power strategy MRL’s expanded remote power service is expected to create significant savings Project overview • MRL will install and operate remote LNG and gas plants to power mine equipment and infrastructure underwritten by long term contracts • MRL’s new solution will provide certaint
Slide 24: LNG and gas power strategy
LNG and gas power strategy MRL’s LNG supply chain solution is fully vertically integrated providing certainty of supply and energy costs MRL’s LNG supply chain Natural gas LNG Conversion Transport Regasification On site energy • MRL has a 19.4% • MRL will convert • MRL will transport • LNG down load
Slide 25: Road transport initiatives
Road transport initiatives Super-quads Overview • MRL has worked closely with WA Department of Main Roads since to operationalise a raft of technology and safety features including a unique trailer coupling design system and electronic brake system • Super-quads have 138 tonnes of payload compared w
Slide 26: Composite materials
Composite materials Carbon fibre Overview • Carbon fibre manufacturing facility, employing robotic technology, for the manufacture of structural components • Develop a range of composite products specifically for the mining and mineral processing industry • New composite products have the potential
Slide 27: Composite materials
Composite materials Benefits • Lighter, resulting in increased payload • Stronger, more durable with Increased economic lifecycle • Free from Oxidisation • Reduced carbon footprint and improved safety during maintenance activities • MRL dump truck fleet replacement will commence from completion of o
Slide 28: BOTS and BOSS
BOTS and BOSS ‘Bulk Ore Transport System’ (BOTS) and ‘Bulk Ore Shuttle System’ (BOSS) developed and capable of delivering significant annuity profit streams for MRL and its customers Overview • BOTS is MRL’s proprietary, mine-to-port transport and infrastructure service comprising an elevated, reloc
Slide 29: Bulk Ore Transportation System (BOTS)
Bulk Ore Transportation System (BOTS) The Bulk Ore Transportation System (BOTS) is a fully autonomous, environmentally friendly and affordable, mine to port transport solution for major, mid and junior bulk commodity producers. • Installed capital cost of BOTS track is approximately 75% cheaper than
Slide 30: Bulk Ore Shuttle System (BOSS)
Bulk Ore Shuttle System (BOSS) ‘Bulk Ore Shuttle System’ (BOSS) is capable of delivering significant cost savings to MRL customers BOSS comparison to a traditional Overland Conveyer • BOSS combines the efficiency of a track mounted vehicle with modern fuel efficient automotive hybrid technology, 100
Slide 31: FY17 outlook
FY17 outlook MINING SERVICES BUSINESS 31
Slide 32: FY17 Outlook
FY17 Outlook • EBITDA guidance of between A$360m and A$400m (assumes proportional consolidation of Mt Marion) Outlook • The key assumptions in this guidance include: ‒ 62% CFR iron ore to average US$60 per dry tonne ‒ Average AUD / USD to average 0.75 ‒ 12.3m tonnes of iron ore export volumes ‒ Iron
Slide 33: Disclaimer
Disclaimer This presentation has been prepared by Mineral Resources Limited (“MRL” or “the Company”). It should not be considered as an offer or invitation to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities.