Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — Diggers and Dealers 2014
25 slides from Fortescue's conference presentation, Aug 5, 2014
Slide 1: Diggers and Dealers 2014
Diggers and Dealers 2014 For personal use only Nev Power, CEO
Slide 2: Disclaimer
Disclaimer For personal use only Important Notice The purpose of this presentation is to provide general information about Fortescue Metals Group Limited ("Fortescue"). It is not recommended that any person makes any investment decision in relation to Fortescue based on this presentation. This prese
Slide 3: Fortescue Update: The journey continues
Fortescue Update For personal use only The journey continues
Slide 4: Building a world class company
Building a world class company Reliable and competitive supplier to Asia For personal use only • First ore 2008 • Over 390mt shipped • 155mtpa production • Large, growing resource base • Unique culture
Slide 5: For personal use only
For personal use only 5
Slide 6: FY14 in review
FY14 in review Delivering 155mtpa For personal use only 124.2mt YTD $US3.1bn 38.7mt June Qtr debt reduction 155 mtpa Annualised run rate Infrastructure complete Mines and processing facilities ramped up US$2.4bn Costs 23% cash on hand efficiency focus 6
Slide 7: Fortescue overview
Fortescue overview Vision to be the safest, lowest cost iron ore producer For personal use only 140.0 50.00 Volume Costs 105.0 40.00 70.0 30.00 35.0 0.0 20.00 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY08 FY09 FY10 FY11 FY12 FY13 FY14 3,000 15,000 Net Profit Debt 12,000 1,500 9,000 6,000 - FY08 FY09 FY10
Slide 8: Building a world class company
Building a world class company World class infrastructure For personal use only • Over 10,000 jobs • 5 mines; 5 processing plants • 3 airports; 30,000 passengers/month • 4 berths; 75 ships/month • 620km rail; 45 locos, 3,384 ore cars
Slide 9: Foundation for the future
Foundation for the future For personal use only
Slide 10: Disciplined capital management
Disciplined capital management Track record of debt repayment delivering investment grade metrics For personal use only • Increased cashflow and US$billions Mtpa 7.0 lower capex 160 6.0 140 • US$2 - $2.5bn targeted 5.0 120 4.0 100 additional repayments 80 3.0 60 – Gearing ~40% 2.0 40 1.0 20 – Net De
Slide 11: Ongoing Projects
Ongoing Projects For personal use only • Targeted exploration continues to increase resource base • AP5 berth adds 15 – 20mtpa outload capacity • Detrital processing plant adds 5mtpa capacity at Solomon • Autonomous haulage increases operational cost efficiencies • Ship construction 250k dwt ore car
Slide 12: Port – flexible design for future growth
Port – flexible design for future growth Fifth berth under construction For personal use only AP3 AP2 AP1 AP4 AP5 2015 12
Slide 13: Market
For personal use only Market
Slide 14: China's growth cities
China’s growth cities 200m people to urbanise by 2020 For personal use only • GDP doubled in 6 years • China has just reached steel consumption levels of a developed country • Record daily steel production 2.3mt • Iron ore imports +20% YTD 14
Slide 15: Demand for seaborne supply
Demand for seaborne supply For personal use only New coastal steel capacity moving away from domestic iron ore Iron Ore Reserves New/proposed steel capacity Seaborne iron ore Source: ANZ Research Seaborne iron ore imports (Ex. Australia, Brazil etc.) 15
Slide 16: Clear strategy
For personal use only 16 Clear strategy
Slide 17: Moving down the global cost curve
Moving down the global cost curve Targeting bottom quartile For personal use only China Iron Ore Supply CFR Costs – May 2014 (including royalties & freight) 200 Domestic Chinese Ore Australia Brazil India 150 South Africa Other US$/dry tonne 100 50 Fortescue 0 0 100 200 300 400 500 600 700 800 900 1
Slide 18: Significant reliance on diesel fuel
Significant reliance on diesel fuel Driven by remote power and mobile fleet consumption For personal use only Total energy spend >US$800 million Diesel (Mine Fleet) Diesel (Rail) Diesel (Mine Power Generation) Diesel Gas (Ancillary) (Power Generation) 18
Slide 19: Fortescue River gas pipeline
Fortescue River gas pipeline Stage 1 – to Solomon Hub For personal use only 19
Slide 20: Competitive energy powering the future
Competitive energy powering the future Unlocking Australia’s energy advantage For personal use only • Transparent Retention Leases enforce “Use it or lose it” policy • Competitively priced energy for our economy • Reducing carbon emissions • Gross State Product +$2.5 billion in 2020 20
Slide 21: Supporting our local community
Supporting our local community For personal use only
Slide 22: VTEC
VTEC Creating opportunities through training and employment For personal use only 1100 Aboriginal employees Aboriginal people in 12% Fortescue workforce Contracts to Aboriginal $1.5bn+ companies and JV’s VTEC Roebourne, Training Centres South Hedland 22
Slide 23: Building our economy
Building our economy Unlocking the potential of WA’s North West For personal use only 15,000 employed AU$800m* wages p.a. AU$2.1bn taxes and royalties p.a. AU$490m localised spend FY14 * applies to full time employee wages only 23
Slide 24: Delivering on targets
Delivering on targets Focused on shareholder value For personal use only • 155mt production rate achieved • Innovative: Have a Crack! • Low cost, low capex, high cashflow • Vision: Safest, lowest cost producer • Unique and strong culture 24
Slide 25: Sign up to alerts online
For personal use only Sign up to alerts online: www.fmgl.com.au Proudly supporting: