Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Investor Presentation (June 2014)
29 slides from Peabody Energy's investor presentation, Jun 25, 2014
Slide 1: June Investor Meeting
June 26, 2014 June Investor Meeting Exhibit 99.1
Slide 2: Statement on Forward-Looking Information
Statement on Forward-Looking Information Certain statements in this press release are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. The company uses words such as “anticipate,” “believe,” “expect,” “may,” “forecast,” “project,” “should,” “estimate,” “plan,” “out
Slide 3: Coal: World's Fastest Growing Major Fuel; Expected to Be Largest Energy Source
Coal: World’s Fastest Growing Major Fuel; Expected to Be Largest Energy Source Rely on low-cost coal to fuel growing economies and raise standards of living 3 Emerging Countries Developed Countries U.S. Demand Long-Term Demand Returning to coal and adding new coal-fueled generation Coal remains larg
Slide 4: Peabody Overview: Our Approach Begins by Answering a Question
Peabody Overview: Our Approach Begins by Answering a Question 4 How to Design the Best Positioned Coal Company? Global Scope Superior Asset Base Low Cost U.S. Position Strong Metallurgical Coal Portfolio Competitive Advantage Proven Track Record Targeting highest-growth markets with tier one assets
Slide 5: Global Coal Markets
Global Coal Markets Saar he SU
Slide 6: Expanding Global Energy Needs Lead to Rising Coal Demand
Expanding Global Energy Needs Lead to Rising Coal Demand 6 Global Coal Demand (MTOE) Global Energy Demand (MTOE) Global Electricity Use (TWh) 0 3,000 6,000 9,000 12,000 15,000 18,000 2010 2020P 2030P 0 6,000 12,000 18,000 24,000 30,000 36,000 2010 2020P 2030P 0 1,000 2,000 3,000 4,000 5,000 2010 202
Slide 7: Increasing Urbanization in Asia Continues to Drive Record Global Coal Demand
Increasing Urbanization in Asia Continues to Drive Record Global Coal Demand ● Urbanization trends lead to greater coal use to fuel growing electricity and steel demand ● More than 70 million people expected to be added to cities each year through 2020 ● Coal is the only affordable fuel, at scale, t
Slide 8: Coal: Least Expensive and Most Reliable Form of Electricity Generation
Coal: Least Expensive and Most Reliable Form of Electricity Generation 8 Source: Peabody Energy Analytics. Coal: ● Only a fraction of other fuels’ costs ● Provides baseload power; easily transported ● Energy dense, abundant and increasingly uses advanced technologies
Slide 9: Policies, Security and Economics Driving Greater Global Coal Use
Policies, Security and Economics Driving Greater Global Coal Use 9 United States Coal increases market share in past 2 years Australia Coal exports rising and strong push by government to repeal carbon tax Europe Energy security crisis emphasizes advantage of coal Japan Coal use remains strong China
Slide 10: New Generation Expected to Drive Significant Global Thermal Coal Demand
0 200 400 600 800 1,000 1,200 2013E 2016P 2020P New Generation Expected to Drive Significant Global Thermal Coal Demand ● New coal-fueled generation of ~250 GW projected by 2016 – Requires 750 million tonnes of new annual coal production at expected capacity utilization ● China and India imports lik
Slide 11: Metallurgical Coal Essential for Rising Steel Production in Emerging Countries
70 545 0 200 400 600 800 1,000 India China K g/ C ap ita Metallurgical Coal Essential for Rising Steel Production in Emerging Countries 2014 Steel Consumption Per Capita Source: Peabody Global Analytics. ~500 Million Tonnes of Metallurgical Coal Required to Reach Stable Stage Steel Intensity of Deve
Slide 12: Growing PCI Market Allows Steel Producers to Offset Higher-Cost Coke
Growing PCI Market Allows Steel Producers to Offset Higher-Cost Coke ● Pulverized Coal Injection a low-cost substitute for coke made from coking coal – 1 ton of low-vol PCI replaces 1.3 tons of hard coking coal ● Modern blast furnaces can use up to 25% PCI ● Majority of high quality low-vol PCI supp
Slide 13: Global Seaborne Supply Growth to Slow; Fundamentals to Gradually Improve
Global Seaborne Supply Growth to Slow; Fundamentals to Gradually Improve 13 Source: Peabody Global Analytics. 0 200 400 Other Mongolia Canada South Africa Colombia U.S. Russia Australia Indonesia 2014 Global Exports (Tonnes in Millions) Total 2014 Exports: 1,300 Million Tonnes Metallurgical Thermal
Slide 14: China Expected to Follow U.S. Path of Greater Coal Use and Lower Emissions
Source: U.S. Energy Information Administration (EIA) 2014 Annual Energy Outlook, 2013; EIA Annual Energy Review, 2012; U.S. Department of Agriculture, 2013; U.S. National Energy Technology Laboratory, 2012; U.S. Environmental Protection Agency, “Clean Air Markets,” 2013. China Expected to Follow U.S
Slide 15: U.S. Coal Increases Market Share; Fuels 42% of Electricity Generation
U.S. Coal Increases Market Share; Fuels 42% of Electricity Generation in the U.S. Source: Peabody Global Analytics and EIA. YTD through April 2014. 15 31% 42% 31% 23% 19% 20% 19% 15% 0% 10% 20% 30% 40% 50% April 2012 April 2014 ● U.S. coal use rebounds materially in the U.S. in past two years ● Gas
Slide 16: SPRB Prices at 30-Month High on Rising Coal Demand, Declining Stockpiles
40 50 60 70 80 90 100 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 SPRB Prices at 30-Month High on Rising Coal Demand, Declining Stockpiles ● SPRB stockpiles below normal at 48 days use; ~50% below 2012 peak levels – Some customer inventories are at less than 10 days use ● SPRB prices up ~30% in last
Slide 17: Annual World Coal Use Expected to Grow 700 Million Tonnes Over Next Three Years
0 2,000 4,000 6,000 8,000 10,000 2013E 2016P 2020P ROW China India Annual World Coal Use Expected to Grow 700 Million Tonnes Over Next Three Years ● Coal is the world’s fastest growing major fuel ● Record global coal use expected to continue on growing electricity and steel demand ● IEA and other ob
Slide 18: Peabody Energy Overview
Peabody Energy Overview 18
Slide 19: Delivering on Long-Term Journey to Reshape Peabody's Asset Base
19 Delivering on Long-Term Journey to Reshape Peabody’s Asset Base • Diverse Global Platform • Largest U.S. Producer • Largest Producer and Reserve Holder in SPRB • Largest Seaborne Supplier of Low-Vol PCI Coal • Third-Largest Australian Reserve Holder • Fifth-Largest Global Seaborne Metallurgical C
Slide 20: Peabody: World's Largest Private-Sector Coal Company
Peabody: World’s Largest Private-Sector Coal Company Metallurgical and Thermal Coal Customers in 25+ Countries Essen Beijing Ulaanbaatar Urumqi Jakarta Balikpapan New Delhi Brisbane, QLD Newcastle, NSW London (From U.S.) St .Louis, MO Singapore Mining Operations and Trading Sales Reserves SPRB 135 3
Slide 21: Peabody's Core Strengths Targeted to Long-Term Value Creation
Peabody’s Core Strengths Targeted to Long-Term Value Creation 21 Superior Asset Base • Leading reserve position • Geographic diversity • Access to high growth markets • Leading presence in PRB and ILB Best-In- Class Operations • Continuous focus on safety • Strong operating performance • Technology-
Slide 22: Competitive Advantage: Productive, Low-Cost SPRB and Western Assets
Competitive Advantage: Productive, Low-Cost SPRB and Western Assets 22 ● North Antelope Rochelle Mine – World’s largest and most productive coal mine – Produces ~110 million tons per year – 2.3 billion tons of reserves ● El Segundo Mine – Most productive U.S. mine outside of the PRB – Produces ~9 mi
Slide 23: Midwest Portfolio Well Positioned: Anchored by Key Mines
Midwest Portfolio Well Positioned: Anchored by Key Mines 23 ● Bear Run Mine – Largest surface mine in Eastern U.S. – Produces 8+ million tons per year – Nearly 275 million tons of reserves ● Gateway Mine – Gateway North to extend production in 2015 – Produces nearly 3 million tons per year Peabody I
Slide 24: Peabody's Australia Strategy: Best Access to High-Growth Asian Market
24 22 – 25 ~ 8 15 – 17 Peabody’s Australia Strategy: Best Access to High-Growth Asian Market ● Australia holds competitive advantage over other nations with mines close to ports; ports near high- growth markets ● Peabody has substantial high-quality coal base; 925 million tons of reserves ● Signific
Slide 25: Driving Further Progress at Australian Metallurgical and Thermal Mines
Driving Further Progress at Australian Metallurgical and Thermal Mines ● Completing ramp up of new longwall top coal caving system at North Goonyella Mine ● New longwall at Metropolitan Mine targets higher productivity ● Completing successful owner-operator conversion initiatives with Moorvale PCI M
Slide 26: Well-Capitalized Platform Allows Low Capital Spending for Multiple Years
Well-Capitalized Platform Allows Low Capital Spending for Multiple Years 26 ● Capex reduced 67% in 2013; 2014 capex target at $250 – $295 million ● First quarter capital expenditures lowest in 10 years ● Sustaining capital trending below historical range of $1.25 – $1.75/ton • SPRB Recapitalization
Slide 27: Peabody's Gross Margins Average Over 40% Above NYSE Peers
Peabody’s Gross Margins Average Over 40% Above NYSE Peers 27 Source: Company filings. 3-year average is 2011– 2013. Peabody gross margins from mining operations and excludes depreciation, depletion, and amortization and asset retirement obligation expenses; U.S. peer gross margins include ACI, ANR,
Slide 28: Peabody Energy: Best Positioned Coal Company
Peabody Energy: Best Positioned Coal Company 28 Global Scope Superior Asset Base Low Cost U.S. Position Strong Metallurgical Coal Portfolio Competitive Advantage Proven Track Record Targeting highest-growth markets with tier one assets in U.S. West, U.S. Midwest and Australia 8 billion tons of coal
Slide 29: PeabodyEnergy.com AdvancedEnergyForLife.com
PeabodyEnergy.com AdvancedEnergyForLife.com