Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — UBS Australasia Conference 2015
23 slides from Whitehaven Coal's conference presentation, Nov 17, 2015
Slide 1: Whitehaven Coal Limited - UBS Australasia Conference
Whitehaven Coal Limited UBS AUSTRALASIA CONFERENCE SYDNEY, AUSTRALIA 16 AND 17 NOVEMBER 2015
Slide 2: Disclosure
Disclosure 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 PROJECTIONS AND ANY ESTIMATE
Slide 3: Agenda
Agenda About Whitehaven Asian growth markets Coal quality Operational performance Growth profile Valuations Conclusion 3 // UBS CONFERENCE PRESENTATION
Slide 4: Our goal
Our goal To become Australia’s leading independent coal company 4 // UBS CONFERENCE PRESENTATION
Slide 5: About Whitehaven Coal
About Whitehaven Coal 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 $A1.1 billion – Trading 80 million shares per month – Eastspring 10.1% – Manning & Napier 6.0% Whitehav
Slide 6: Where we operate
Where we operate LOW COST PRODUCER OF HIGH QUALITY METALLURGICAL AND THERMAL COAL Maules Creek (75%) Tier One Mine – Reserves: ~ 30 years, Permitted & Planned 13Mtpa – SSCC, PCI and high energy thermal Narrabri (70%) Tier One Mine – Reserves: ~ 25 years, Permitted 8Mtpa, Planned 7Mtpa – PCI & low as
Slide 7: Where we expect to sell our coal
Where we expect to sell our coal COAL SOLD INTO THE PREMIUM ASIAN MARKETS Thermal Coal Sales Targets FY2019 – By FY2019 Whitehaven expects sales to 10% Japan increase to about 26Mt on a 100% basis 15% Korea comprising 9Mt of metallurgical coal and 17Mt 50% SE Asia thermal coal 25% Taiwan – Whitehave
Slide 8: Why we sell into these markets
Why we sell into these markets STRONG LONG TERM GROWTH IN SE ASIAN COUNTRIES – Every Southeast Asian country, as well as our IEA Forecast Coal Fired Electricity Capacity (GW) traditional markets of Japan and Korea, is and Coal Required (Mt) adding electricity generating capacity 600 500 – SE Asia is
Slide 9: Why SE Asian countries use coal
Why SE Asian countries use coal COAL IS A LOW COST SOURCE OF ELECTRICITY FOR THE REGION Levelised Cost of Electricity SE Asia – Improvement in living standards - (US$/MWh) countries are adding electricity 140 generating capacity so that an 120 estimated 120 million people in the region can have acce
Slide 10: Low emission capacity is being added
Low emission capacity is being added 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 (1GW) 200 150 – Ultra su
Slide 11: High quality coal underpins Asian emission reductions
High quality coal underpins Asian emission reductions 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 emissions by up to 40% ef
Slide 12: Whitehaven is redefining coal quality in the Asian market
Whitehaven is redefining coal quality in the Asian market 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 0.50 – As countries striv
Slide 13: Case study - Narrabri
Case study - Narrabri 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 the art Isogo power stat
Slide 14: Safety performance
Safety performance 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 Safehaven Rules end the y
Slide 15: Whitehaven costs have fallen
Whitehaven costs have fallen 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 first half $65 – Whitehav
Slide 16: Increasing productivity
Increasing productivity 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 was 8,800t and 10,300t
Slide 17: How have gains been achieved
How have gains been achieved 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 and centralised shared
Slide 18: Growth path fully funded
Growth path fully funded 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 be in the range of 18
Slide 19: Valuation comparison
Valuation comparison 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 (Mt) 19.5 Transaction C
Slide 20: Key takeaways
Key takeaways 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 productivity improve ove
Slide 21: Thank you
THANK YOU www.whitehavencoal.com.au
Slide 22: Appendices
Appendices 22 //UBS CONFERENCE PRESENTATION
Slide 23: Reserves
Reserves 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 0.9 4.6 2.9 0.7 3.5 1