Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — Shareholder Meeting (October 2018)
46 slides from Whitehaven Coal's shareholder meeting presentation, Oct 25, 2018
Slide 1: Annual General Meeting – Chairman's Address and Managing Director's Presentation
25 October 2018 For personal use only The Manager, Listings Australian Securities Exchange Company Announcements Office Via ASX Online Dear Sir, Annual General Meeting – Chairman’s Address and Managing Director’s Presentation We attach copies of the Chairman’s Address and Managing Director’s Present
Slide 2: Chairman's Address
WHITEHAVEN COAL AGM 2018 For personal use only 25 October 2018 Chairman’s Address I’ll now turn to my Chairman’s Report on Whitehaven’s performance for the 2018 financial year – a period which, on any measure, has been a busy and transformative one for your Company. Over the course of the past year,
Slide 3: Chairman's Address (continued)
Not only are we growing in scale, we are actively working to build a people and performance culture that better aligns with a larger, more resilient and more sustainable Company over the long-term. Having grown from comparatively humble beginnings just over a decade ago, we are truly at an exciting
Slide 4: Chairman's Address – climate change disclosure
We do, however, want to ensure our climate change disclosure practices broadly evolve in-line with industry trends and shareholder expectations. This is why we announced that, for 2019, we would look to align our reporting with the voluntary disclosure framework proposed by the task force on climate
Slide 5: Chairman's Address – conclusion
Looking back on what represents a period of significant achievement, I would like to conclude by taking this opportunity to pay tribute once again to my fellow directors, senior management and the entire Whitehaven workforce, and to thank our joint venture partners, banking syndicate and our shareho
Slide 6: Whitehaven Coal Limited FY2018
For personal use only WHITEHAVEN COAL LIMITED AUSTRALIA’S LEADING HIGH QUALITY COAL COMPANY AGM PRESENTATION FY2018 25 OCTOBER 2018
Slide 7: Disclosure
DISCLOSURE For personal use only 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 PROJEC
Slide 8: Contents
CONTENTS For personal use only – Highlights – Safety Performance – Financial Performance – Operations – Growth – Community – Outlook for Coal Use – Outlook for Whitehaven – Appendices 3 // AGM FY2018
Slide 9: Highlights
HIGHLIGHTS HIGHLIGHTS For personal use only RECORD FULL YEAR PROFIT Safety improved with the Record full year net profit of TRIFR declining to 6.9 at 30 $525.6 million up 30% June Equity coal sales of 17.4Mt Record EBITDA of $940.0 including purchased coal million up 32% on pcp A final dividend of $
Slide 10: Safety Performance
SAFETY PERFORMANCE SAFETY PERFORMANCE For personal use only IMPROVING SAFETY PERFORMANCE – Whitehaven’s safety performance has Whitehaven Group TRIFR & Saleable Coal Production (Mt) continued to improve as production 25 has increased 20 – The successful implementation of the “Safehaven Rules” progra
Slide 11: Financial Performance
For personal use only FINANCIAL PERFORMANCE
Slide 12: Financial Highlights
FINANCIAL PERFORMANCE FINANCIAL HIGHLIGHTS For personal use only TOTAL OF $595 MILLION RETURNED TO SHAREHOLDERS IN LESS THAN ONE YEAR Profit and loss FY2018 FY2017 Comment Net profit after tax ($’m) including significant items 525.6 405.4 – Up 30%, record full year profit Underlying EBITDA before si
Slide 13: Costs and Margins
FINANCIAL PERFORMANCE COSTS AND MARGINS For personal use only LIFT IN MARGINS FROM HIGHER COAL PRICES Whitehaven's ASP and Costs ex Royalties ($/t) – Coal prices in Australian dollar terms 140 (excluding royalties) increased 16% during the year and averaged $161/t in the 120 September quarter – Achi
Slide 14: Balance Sheet
FINANCIAL PERFORMANCE BALANCE SHEET For personal use only BALANCE SHEET IN EXCELLENT SHAPE 30 June 2018 30 June 2017 – Strong balance sheet supports a sustainable capital $’m $’m allocation framework Cash on hand 111.8 87.1 – The Board paid an unfranked dividend of $0.27 per share in September 2018
Slide 15: Operations
For personal use only OPERATIONS
Slide 16: Managed Production
OPERATIONS MANAGED PRODUCTION For personal use only STRONG GROWTH OVER A NUMBER OF YEARS Whitehaven Managed Saleable Production (Mt) – Managed coal sales have grown fivefold 25.0 since FY2012 the year prior to commercial production at Narrabri 20.0 – Total production in FY2018 on a managed 15.0 basi
Slide 17: Sales to Premium Markets
OPERATIONS SALES TO PREMIUM MARKETS For personal use only WHITEHAVEN CONTINUES TO INCREASE SALES INTO GROWING SE ASIA MARKET Thermal Coal Sales FY2018 – Managed coal sales of 22.1Mt including purchased 4% 3% 3% coal for the year Japan 4% Taiwan – Increasing sales of higher quality coal has seen 11%
Slide 18: Maules Creek Mine
OPERATIONS MAULES CREEK MINE For personal use only MAULES CREEK PRODUCTION CONTINUES RAMPING TO ITS APPROVED LEVEL Maules Creek Saleable Coal Production (Mt) – Maules Creek ROM coal production 10.0 achieved an annualised rate of 11.7Mt in the second half of the year 8.0 – The approved production lev
Slide 19: Narrabri Mine
OPERATIONS NARRABRI MINE For personal use only ONE OF THE MOST PRODUCTIVE UNDERGROUND MINES IN AUSTRALIA Narrabri ROM Coal Production (000's t) – Mining in LW108 commenced in September 8,000 – ROM coal production for FY2019 is expected 7,000 to be in the range of 6.5Mt to 6.8Mt 6,000 – Mechanical is
Slide 20: Gunnedah Open Cuts
OPERATIONS GUNNEDAH OPEN CUTS For personal use only A STABLE PRODUCTION PLATFORM OVER A NUMBER OF YEARS Gunnedah Open Cuts Saleable Coal – Consistent production over a number of Production (Mt) years 6.00 – Whitehaven acquired an additional 30% 5.00 interest in the Tarrawonga mine during the year an
Slide 21: Growth
For personal use only GROWTH -N WHITEHAVEN COAL PP WHITEHAVEN
Slide 22: Vickery
GROWTH VICKERY For personal use only – The project is located 25km north of Gunnedah and will be connected to the mainline by a rail spur – Tarrawonga economics significantly enhanced by short road haul with coal loaded directly onto the rail – When Vickery is completed, it is proposed that the Gunn
Slide 23: Vickery Extension Project
GROWTH VICKERY EXTENSION PROJECT For personal use only EIS LODGED WITH NSW GOVERNMENT AUTHORITIES Project is fully approved as a 4.5Mtpa open cut. Whitehaven is seeking approval to increase production to 10Mtpa – The approval process has begun, public exhibition of the EIS ends today – Whitehaven ha
Slide 24: Winchester South Project
GROWTH WINCHESTER SOUTH PROJECT For personal use only ACQUISITION OF A HIGH QUALITY METALLURGICAL COAL PROJECT COMPLETED – Located in Queensland’s Bowen Basin, the source of over half the world’s high quality metallurgical coals – The project is well placed in relation to key infrastructure with rai
Slide 25: Location
GROWTH LOCATION For personal use only – Tenure: – Granted MDL183 – Rail: – Main line passes over the tenement – JORC Resources: – Total of 530Mt – Possible Mine Stats: – Open cut with a plus 30 year life – Low LOM strip ratio (~5.0:1) – ROM production up to 15Mtpa – Product mix of metallurgical (75%
Slide 26: Extensively Drilled
GROWTH EXTENSIVELY DRILLED For personal use only Main rail line – Previous owners have extensively drilled the project with over 1200 holes, and 60 kilometres of seismic lines used to understand the geology and calculate the Resources – Whitehaven will conduct a programme of coal quality drilling ov
Slide 27: Development Strategy
GROWTH DEVELOPMENT STRATEGY For personal use only DEVELOP A HIGH-QUALITY, LARGE SCALE, LOW COST COKING COAL MINE – Target end of H1 FY2019 – Full review and update the JORC Resources and mining studies – Continue key environmental studies and data collection for approvals – Submit ML and EA applicat
Slide 28: Community
For personal use only COMMUNITY
Slide 29: Working with the Community
COMMUNITY WORKING WITH THE COMMUNITY For personal use only WHITEHAVEN HAS STRONG POSITIVE REPUTATION IN THE REGION Note: Financial numbers include Whitehaven and its Joint Venture Partners 24 //AGM FY2018
Slide 30: Outlook for Coal Use
For personal use only COAL USE OUTLOOK FOR
Slide 31: Commitment to Coal Use
OUTLOOK FOR COAL USE COMMITMENT TO COAL USE For personal use only A TOTAL OF 24 COUNTRIES HAVE INCLUDED COAL USE IN THEIR NATIONALLY DETERMINED CONTRIBUTIONS – Three of the largest coal users – China, India and World Coal Consumption 2016 - 5,365Mtce Japan representing 66% of coal consumption in 201
Slide 32: IEA New Policy Projections
OUTLOOK FOR COAL USE IEA NEW POLICY PROJECTIONS For personal use only COAL DEMAND IS PROJECTED TO INCREASE OUT TO AT LEAST 2040 World Coal Demand Growth (Mtce) – Under the New Policies Scenario, where the 5700 IEA assumes all countries meet their NDCs, coal demand is projected to increase from 5600
Slide 33: Asian Demand Growth
OUTLOOK FOR COAL USE ASIAN DEMAND GROWTH For personal use only ASIA - THE LARGEST GROWTH AREA FOR COAL OVER THE NEXT 25 YEARS Asian Coal Demand Growth (Mtce) – IEA New Policy Scenario projections indicate 4500 that in the broad Asian region coal demand 4400 continues to grow in the outlook period ad
Slide 34: World Electricity Generation
OUTLOOK FOR COAL USE WORLD ELECTRICITY GENERATION For personal use only COAL IS FORECAST TO REMAIN A SIGNIFICANT PART OF THE GENERATION MIX 2016 World Electricity Generation 24,765TWh 2040 World Electricity Generation 39,289TWh 1% 8% 4% 1% Coal 2% 26% 11% Coal Gas Gas 16% Oil 38% Oil Nuclear 4% Nucl
Slide 35: What Is the Growth Driver?
OUTLOOK FOR COAL USE WHAT IS THE GROWTH DRIVER? For personal use only COAL DEMAND GROWTH IS DRIVEN BY THE DEPLOYMENT OF NEW POWER STATIONS – Deployment of new coal fired generating Annual New Coal Fired Capacity (GW) capacity continues throughout Asia 80.0 70.0 – Forecast additional capacity excludi
Slide 36: Electricity Growth in Asia
OUTLOOK FOR COAL USE ELECTRICITY GROWTH IN ASIA For personal use only ASIAN ELECTRICITY PRODUCTION IS PROJECTED TO GROW BY 89% BY 2040 Asian Electricity Growth (TWh) – Under the New Policies scenario, electricity 20000 demand in Asia is projected to grow from 18000 9,433TWh in 2016 to 17,827TWh in 2
Slide 37: SE Asia Electricity Growth
OUTLOOK FOR COAL USE SE ASIA ELECTRICITY GROWTH For personal use only COAL INCREASES ITS SHARE OF GENERATION OVER THE NEXT 20 YEARS Electricity Generation in SE Asia (TWh) – According to IEA New Policy scenario 2500 projections, electricity demand in SE Asia is estimated to grow from 2000 917TWh in
Slide 38: Outlook for Whitehaven
OUTLOOK FOR For personal use only WHITEHAVEN
Slide 39: Whitehaven's Production Profile
OUTLOOK FOR WHITEHAVEN WHITEHAVEN’S PRODUCTION PROFILE For personal use only PRODUCTION TO GROW WITH VICKERY AND WINCHESTER SOUTH DEVELOPMENT Whitehaven Saleable Coal Forecast Production Profile (100%, – Managed saleable coal Mt) production is forecast to grow 40 35 strongly from the start-up of 30
Slide 40: Targets for FY2019
OUTLOOK FOR WHITEHAVEN TARGETS FOR FY2019 For personal use only CONTINUING TO DELIVER Operations − Continue improving safety performance − Deliver saleable coal production guidance in the range of 22.0Mt to 23.0Mt (100% basis) − Deliver FY2019 cost guidance of A$64/t − Continue ramping up production
Slide 41: Thank You
For personal use only THANK YOU www.whitehavencoal.com.au
Slide 42: Appendices
For personal use only APPENDICES
Slide 43: Appendices – Resources
APPENDICES RESOURCES For personal use only 38 //AGM FY2018
Slide 44: Appendices – Reserves
APPENDICES RESERVES For personal use only Note: See Competent Person Statement on Slide 2 39 //AGM FY2018
Slide 45: Winchester Resources
APPENDICES WINCHESTER RESOURCES For personal use only Winchester Coal Resources Tenement Measured Indicated Inferred Total Competent Report Resource Resource Resource Resource Person Date Mt Mt Mt Mt MDL183 130 300 100 530 Troy Turner Oct-18 Information in this report that relates to Coal Resources
Slide 46: IEA Scenarios
APPENDICES IEA SCENARIOS For personal use only The key aim of the World Energy Outlook to provide all those with a stake in the energy sector with a robust analysis of possible future energy pathways, under different sets of assumptions, as an aid to their decision-making. Two of the WEO-2017 scenar