Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — Investor Presentation (April 2013)
29 slides from Fortescue's investor presentation, May 1, 2013
Slide 1: Corporate Presentation April 2013
For personal use only Corporate Presentation April 2013
Slide 2: Disclaimer
Disclaimer For personal use only Important Notice The purpose of this presentation is to provide general information about Fortescue Metals Group Ltd ("Fortescue"). It is not recommended that any person makes any investment decision in relation to Fortescue based on this presentation. This presentat
Slide 3: Company overview
For personal use only Company overview 3
Slide 4: Fortescue
Fortescue World’s 4th biggest seaborne exporter For personal use only 25.3mt mined in March 2012 quarter 15.6bt Costs 155 mtpa by December resource base Efficiency 2013 focus strong Firetail $1.5bn operating commissioning cash cash flows underway 4
Slide 5: A differentiated model
A differentiated model Delivering results For personal use only Relationships Direct relationships with sub contractors and local suppliers China Leveraging China’s growth and manufacturing capability Speed Speed of delivery – time is money Planning Planning for scale today and efficiency into the f
Slide 6: Growth across all areas
Growth across all areas Continuing growth trajectory over FY2013 For personal use only Mining Processed Port Ore Mined (wmt) Ore Processed (wmt) Total Ore Shipped (wmt) 30 25 25 25 20 20 20 Million tonnes Million tonnes Million tonnes 15 15 15 10 10 10 5 5 5 0 0 0 Q308 Q109 Q309 Q110 Q310 Q111 Q311
Slide 7: The path to 155mtpa
For personal use only The path to 155mtpa 7
Slide 8: Delivering 155mtpa
Delivering 155mtpa For personal use only 50mtpa delivered +50mtpa to be delivered Board approval for expansion to 155mtpa by June 2014 CC 2 completed Firetail to 20mtpa TUL 2 & 3 delivered Kings OPF construction US$5.0bn re-fi Complete TPI sale 1st ore from Solomon AP4 + 3rd outload circuit Hamersle
Slide 9: Highlights March Quarter FY2013
Highlights March Quarter FY2013 For personal use only • Average realised CFR sales price of US$131dmt • Record 25.3mt mined, 51% higher than prior quarter • Shipped 20.2mt, resulting in a 3% increase on the prior quarter • Efficiencies driving C1 costs down to US$43.61wmt • Cost savings to date of U
Slide 10: Financials
For personal use only Financials 10
Slide 11: Operating margins support
Operating margins support Fortescue’s average realised selling price and C1 costs For personal use only US$/wmt 62% Platts US$/dmt 200 200 180 180 160 160 $146 140 140 $127 $127 $119 120 $114 120 $100 $74 100 $96 100 $65 $57 $45 $58 $77 $28 80 $44 80 $64 $58 60 $32 $22 $22 $20 $18 60 $8 $18 $18 $24
Slide 12: Capital Expenditure
Capital Expenditure March Quarter FY2013 For personal use only FY2011 FY2012 FY2013 FY2014 US$bn Actual Actual Forecast Indicative 155mtpa expansion 0.5 4.1 3.8 0.6 Operational capital 0.3 0.9 0.9 0.7 Other capital projects 0.6 0.3 0.2 0.3 Exploration 0.3 0.4 0.1 0.1 Fleet ‐ 0.4 1.3 0.2 Total 1.7 6.
Slide 13: Simplified debt capital structure
Simplified debt capital structure Increased flexibility with new debt maturity schedule For personal use only $5.0 $4.5 $4.0 NO DEBT REPAYMENT $3.5 until November 2015 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 CY2012 CY2013 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 CY2021 CY2022 Senior Secured Credi
Slide 14: Capital management
Capital management March Quarter FY2013 For personal use only • Flexible debt maturity profile • Continued drive to reduce operating costs • Disciplined capital allocation to key projects • De-gear balance sheet • Adopt a profit payout ratio dividend policy 14 14
Slide 15: Market
For personal use only Market 15
Slide 16: Long term confidence in China
Long term confidence in China Lower growth rates but still strong in absolute volumes For personal use only • Strong underlying economy >7% GDP growth (IMF 8%) • New leaders committed to growth • Steel consumption greater than 2.0mt per day • Urbanisation & infrastructure driving steel demand • Iron
Slide 17: Iron ore stocks remain relatively low
Iron ore stocks remain relatively low For personal use only Tonnes million US$/t 120 180 160 100 140 80 120 100 60 80 40 60 40 20 20 0 0 6/07/2012 6/08/2012 6/09/2012 6/10/2012 6/11/2012 6/12/2012 6/01/2013 6/02/2013 6/03/2013 6/04/2013 Australia Others Platts CFR 62% Fe US$/t (RHS) Source: Mysteel
Slide 18: China steel intensity below global averages
China steel intensity below global averages Developed economies have spent 40+ years consuming more than 500kg of For personal use only steel per person – China is yet to reach this level Steel Intensity & GDP 1850-2012 (smoothed) kg/capita 1,400 Korea 1,200 1,000 Taiwan 800 Japan 600 Germany China
Slide 19: Steel consumption per capita
Steel consumption per capita China has only just reached levels of consumption maintained by developed countries for decades For personal use only Kg's per capita 900 800 700 600 500 400 300 200 100 0 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 China USA Japan Germany Source: Macquar
Slide 20: Strong rebounds follow price drops
For personal use only $100.00 $110.00 $120.00 $130.00 $140.00 $150.00 $160.00 $170.00 $180.00 $190.00 $200.00 09‐Jul‐10 06‐Aug‐10 03‐Sep‐10 01‐Oct‐10 29‐Oct‐10 26‐Nov‐10 24‐Dec‐10 21‐Jan‐11 18‐Feb‐11 18‐Mar‐11 15‐Apr‐11 13‐May‐11 10‐Jun‐11 08‐Jul‐11 05‐Aug‐11 02‐Sep‐11 30‐Sep‐11 Strong rebounds foll
Slide 21: Clear Strategy
For personal use only Clear Strategy 21
Slide 22: Moving down the global cost curve
Moving down the global cost curve Targeting bottom quartile For personal use only CFR equivalent Cost of China's Iron Ore Supply: 2013 Domestic Chinese Ore 150 Australia Brazil India South Africa Other 100 US$/dry tonne 50 0 0 100 200 300 400 500 600 700 800 900 1,000 1,100 Cumulative Mt (wet, as de
Slide 23: Flexible design for future growth
Flexible design for future growth Fifth berth approved For personal use only * 120mtpa allocated priority capacity 23 23
Slide 24: Resource portfolio sets expansion platform
Resource portfolio sets expansion platform To leverage existing assets for low cost growth For personal use only 18,000 Annualised growth of 2bt 16,000 14,000 Mineral Resources (Mt) 5,205 12,000 per annum 3,236 10,000 2,465 2,463 8,000 2,013 1,032 624 624 624 1,230 6,000 1,230 3,247 3,070 3,070 2,86
Slide 25: Supporting the community
Supporting For personal use only the community 25
Slide 26: Making a difference
Making a difference Fortescue is changing lives through training and employment For personal use only Direct Aboriginal 418 employees 11% Aboriginal people in Fortescue workforce 350 Aboriginal people employed by contractors $630m Contracts to Aboriginal contractors VTEC Operating in Roebourne and S
Slide 27: Delivering on targets
Delivering on targets For personal use only Strong financial results Expansion to 155mtpa Deleverage following expansion Flexible incremental growth Unique culture drives performance 27
Slide 28: Proudly supporting
For personal use only Proudly supporting: Sign up to alerts online: www.fmgl.com.au
Slide 29: Glossary
Glossary Definition of non-IFRS terms For personal use only EBITDA = profit before income tax adjusted for depreciation and amortisation, net finance expenses and refinancing costs Return on equity = profit for the year after income tax divided by total equity Cash flow per share (CFPS) = net cash i
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