Vale S.a. · BMFBOVESPA:VALE3
Vale — Citi 9th Annual Brazil Equity Conference (June 2017)
12 slides from Vale's conference presentation, Jun 28, 2017
Slide 1: Vale: a vision of the future
Ricardo Teles / Agência Vale Vale: a vision of the future Fabio Schvartsman Citi – 9th Annual Brazil Equity Conference São 1 Paulo, June 28th, 2017
Slide 2: Forward-looking statements and cautionary note
“This presentation may include statements that present Vale's expectations about Agend future events or results. All statements, when based upon expectations about the future and not on historical facts, involve various risks and uncertainties. Vale cannot guarantee that such statements will prove c
Slide 3: The 60-day task force will define priority actions in performance, growth and diversification
3 The 60-day task force will define priority actions in the areas of performance, growth and diversification • Profitability of assets • Business performance Performance • Organizational structure • Collaboration among departments • Trade-off between payment of dividends, investments and M&A Growth
Slide 4: Vale's value generation strategy will be based on four main pillars
4 Vale’s value generation strategy will be based on four main pillars Performance Strategy Governance Sustainability • Assessment of assets with • Diversification of cash • Transformation of Vale into • To become a reference in negative cash generation generation from operations a corporation sustai
Slide 5: Matrix-approach for cost management as a performance lever
5 In regards to performance, an important lever will be the implementation of a matrix-approach for cost management Stabilization of cash cost in BRL Iron ore and pellets EBITDA breakeven BRL/t US$/t One-off costs One-off positive impact of insurance +13.6% 31.8 30.6 1.3 30.5 28.0 1Q16 1T16 4Q16 4T1
Slide 6: Improving competitiveness by leveraging the quality of our operations and products
6 We aim at further improving improve our competitiveness by leveraging the quality of our operations and products Iron ore production in the Northern System 65% Fe iron ore premium and 58% Fe discount % of total production US$/t compared to IODEX 62% Premium/discount per ton in June 22th, 2017 30 D
Slide 7: High share of ferrous minerals in Vale's EBITDA
7 In regards to strategy, despite the diversification of the asset base, there is still a high share of ferrous minerals in Vale’s EBITDA Distribution of asset base among businesses Vale’s EBITDA breakdown in 2016 % of fixed and intangible assets, 2016 US$ million Ferrous Minerals % of EBITDA Nickel
Slide 8: High correlation between cash generation and iron ore prices
8 The high correlation between cash generation and iron ore prices indicates the dependence on ferrous minerals Vale’s EBITDA and average iron ore price IODEX 62% EBITDA 40,000 IODEX 62% 180 US$/t US$milhões 169 US$/t million 35,000 US$ 150 135 130 30,000 120 25,000 97 20,000 90 15,000 56 58 60 10,0
Slide 9: Operations with low cash generation performance need to be reevaluated
9 Operations with low cash generation performance need to be reevaluated Examples EBITDA minus sustaining capex, 2014-2016 accumulated, US$ million Minério de Ferro no 0 1 2 VNC Centro Oeste Onça Puma Total -1.291 -1.655 -511 147 9 1 Including disbursement related to the take or pay of barges in the
Slide 10: Board of Directors will be empowered to better take decisions
10 In regards to Governance, the Board of Directors will be empowered to better take decisions • The process of voting instruction will stop being defined in Valepar’s Board of Directors • The decisions will be taken within Vale’s Board of Directors • The representativeness of the Board will be pote
Slide 11: Sustainability will be a main factor in Vale's business decisions
11 Sustainability will be a main factor to be taken into consideration in Vale’s business decisions Sustainability Pillars Vision • Health & Safety – Zero Harm To be known as the • Local Development most sustainable • Social Strengthening mining company in the • Environmental Responsibility industry
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