Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — Shareholder Meeting (November 2013)
37 slides from Fortescue's shareholder meeting presentation, Nov 13, 2013
Slide 1: Annual General Meeting
Annual General Meeting For personal use only 13 November 2013
Slide 2: Chairman's Welcome
For personal use only Chairman’s Welcome
Slide 3: CEO's Address
For personal use only CEO’s Address
Slide 4: Building World Class Operations
Building World Class Operations Unprecedented ramp up For personal use only • Founded 2003 • First ore 2008 • 100mt expansion 2011 - 2013 • First dividend 2011 • Ramp up to 155mtpa 2014 4
Slide 5: FY13 pivotal in Fortescue's history
FY13 pivotal in Fortescue’s history World’s fourth largest seaborne exporter For personal use only Expansion 81mt • Firetail • Port shipped in FY13 • Rail 155mtpa by Costs efficiency focus March 2014 A$0.10 15.6bt final fully franked dividend declared resource base 5
Slide 6: Financial Summary FY13
Financial Summary FY13 Record operational results delivering financial strength For personal use only • Record revenue US$8.1bn 21% • EBITDA of US$3.6bn 18% & NPAT US$1.7bn • Capital expenditure of US$6.2bn • Net debt US$9.9bn* - peak debt behind us • Flexible debt structure with early repayment
Slide 7: Our operations in the Pilbara
Our operations in the Pilbara Corporate DVD For personal use only 7
Slide 8: Our operations in the Pilbara
Our operations in the Pilbara Corporate DVD For personal use only 8
Slide 9: Peter Meurs
For personal use only Peter Meurs
Slide 10: Our operations in the Pilbara
Our operations in the Pilbara Corporate DVD For personal use only 10
Slide 11: Resumes
For personal use only Resumes CEO’s Address
Slide 12: Culture the Foundation of Success
For personal use only Culture the Foundation of Success Heading here 12
Slide 13: A differentiated model
A differentiated model Delivering results For personal use only China Leveraging China’s growth and manufacturing capability Speed Speed of delivery – time is money Planning Planning for scale today and efficiency into the future Relationships Direct relationships with sub contractors and local supp
Slide 14: Market
For personal use only Market
Slide 15: Long term confidence in China
Long term confidence in China Fortescue now a reliable, mainstream supplier to the Chinese steel industry For personal use only • Strong underlying economy 7.8 per cent GDP growth • Leadership committed to growth • Steel consumption greater than 2.1mt per day • Urbanisation and infrastructure drivin
Slide 16: History shows price volatility
For personal use only 16 $80 $90 $100 $110 $120 $130 $140 $150 $160 $170 $180 $190 $200 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Strong rebounds follow price drops Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 History s
Slide 17: China GDP Volume
China GDP Volume Lower growth rates but very strong in absolute volumes For personal use only GDP Trillion RMB GDP % Growth 60 16 14 50 12 40 10 30 8 6 20 4 10 2 0 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 GDP % Growth 17
Slide 18: Social Responsibility
Social Responsibility For personal use only
Slide 19: Safety
Safety Fortescue focused on improving performance For personal use only Fortescue Safety Results • Core family value 16 14 • Eternal vigilance & commitment 12 10 • Focus on behaviours 8 6 • Visible leadership 4 “Our Brother’s Keeper” 2 • 0 FY11 FY12 FY13 TRIFR 19
Slide 20: Making a difference
Making a difference Jobs and opportunities replacing welfare For personal use only 489 Direct Aboriginal employees Aboriginal people in 12.5% Fortescue workforce Aboriginal people employed 481 by contractors 1,000+ Trained through VTEC Contracts awarded to $1.4bn Aboriginal companies + JV’s 20
Slide 21: Traditional Owner Partnerships
Traditional Owner Partnerships 3,157 Heritage sites found by Fortescue For personal use only 7 Native Title Agreements across our Pilbara operations • Building relationships delivering real benefits to communities • Partnerships for identifying and protecting heritage • Delivering certainty of tenur
Slide 22: Environmental excellence
Environmental excellence Case study: Papa Warringka (Nyiyaparli for Water in the Ground) For personal use only • Managed Aquifer Recharge Scheme • Maintains natural balance in the aquifer system • WA, National and International awards • Zero discharge of water to our environment 22
Slide 23: Looking Forward
For personal use only Looking Forward
Slide 24: A new era for Fortescue
A new era for Fortescue CAPEX declines rapidly as production climbs For personal use only CAPEX Spend WMT (US$bn) Shipped 9.0 160 Forecast 140 CAPEX 7.5 120 6.0 100 4.5 80 PRODUCTION 60 3.0 40 1.5 20 0.0 - WMT Shipped 24
Slide 25: Moving down the global cost curve
Moving down the global cost curve Targeting bottom quartile For personal use only October 2013 CFR Cost of China's Iron Ore Supply – August 2013 (including royalties & freight) 200 Domestic Chinese Ore Australia Brazil India 150 South Africa Other US$/dry tonne 100 50 Fortescue 0 0 100 200 300 400 5
Slide 26: Debt repayment has commenced
Debt repayment has commenced Staged debt reduction focused on short term bond maturities For personal use only 5,000 4,950 Term Loan 4,500 repayable at any time 4,000 3,500 2015 and 2016 Notes are now 3,000 callable US$m 2,500 2,000 1,000 1,500 1,500 1,000 1,040 1,000 1,000 900 500 600 0 CY2013 CY20
Slide 27: Delivering on targets
Delivering on targets 10 years strong For personal use only • Strong financial results • Expansion to 155mtpa • Strong cash position reduces net debt with repayments in 2013 • Move to a dividend pay out ratio • Flexible incremental growth • Unique culture drives performance 27
Slide 28: Business of Meeting
Business of Meeting For personal use only Resolutions
Slide 29: Agenda Item – Financial Reports
Agenda Item 1 – Financial Reports For personal use only To receive and consider the financial report, the reports of the Directors and the auditors of the Company and its controlled entities for the year ended 30 June 2013. Further information: Mr Stephen Pearce, Fortescue’s CFO and Mr Nick Henry fr
Slide 30: Resolution – Adoption of Remuneration Report
Resolution 1 – Adoption of Remuneration Report For personal use only Resolution: To consider and, if thought fit, to pass, with or without amendment, the following resolution as an advisory resolution: “That the Remuneration Report for the Company and its controlled entities for the year ended 30 Ju
Slide 31: Resolution – Election of Ms Elizabeth Gaines
Resolution 2 – Election of Ms Elizabeth Gaines For personal use only Resolution: To consider and, if thought fit, to pass, with or without amendment, the following resolution as an advisory resolution: “ That Ms Elizabeth Gaines be elected as a Director of the Company.” Proxy results: FOR AGAINST OP
Slide 32: Resolution – Election of Mr Peter Meurs
Resolution 3 – Election of Mr Peter Meurs For personal use only Resolution: To consider and, if thought fit, to pass, with or without amendment, the following resolution as an advisory resolution: “ That Mr Peter Meurs be elected as a Director of the Company.” Proxy results: FOR AGAINST OPEN TO CHAI
Slide 33: Resolution – Election of Ms Sharon Warburton
Resolution 4 – Election of Ms Sharon Warburton For personal use only Resolution: To consider and, if thought fit, to pass, with or without amendment, the following resolution as an advisory resolution: “ That Ms Sharon Warburton be elected as a Director of the Company.” Proxy results: FOR AGAINST OP
Slide 34: Resolution – Re-Election of Mr Mark Barnaba
Resolution 5 – Re-Election of Mr Mark Barnaba For personal use only Resolution: To consider and, if thought fit, to pass, with or without amendment, the following resolution as an advisory resolution: “ That Mr Mark Barnaba be re-elected as a Director of the Company.” Proxy results: FOR AGAINST OPEN
Slide 35: Resolution – Approval of Capacity to Grant Performance Rights
Resolution 6 – Approval of Capacity to Grant Performance Rights to Executive Directors Approval of Capacity to Grant Performance Rights to Executive Directors For personal use only Resolution: To consider and, if thought fit, to pass, with or without amendment, the following resolution as an advisor
Slide 36: Chairman's Address
For personal use only Chairman’s Address
Slide 37: Sign up to alerts online
For personal use only Sign up to alerts online: www.fmgl.com.au Proudly supporting:
Fortescue Metals Group — Shareholder Meeting (November 2013) on 6ix