Om Holdings Ltd. · ASX:OMH
Om — Investor Presentation (April 2019)
28 slides from Om's investor presentation, Apr 5, 2019
Slide 1: OM Holdings Limited
1 OM HOLDINGS LIMITED Australia • China • Japan • Malaysia • Singapore • South Africa April 2019 • Sydney Mining Club • ASX:OMH
Slide 2: Disclaimer
2 DISCLAIMER This presentation has been prepared and issued by OM Holdings Limited ARBN 081 028 337 (“OMH”). This presentation contains summary information about OMH. The information in this presentation does not purport to be complete or to provide all information that an investor should consider w
Slide 3: This Is Our Story
THIS IS OUR STORY
Slide 4: OMH Group: Manganese & Silicon Specialist
4 OMH GROUP: MANGANESE & SILICON SPECIALIST We are a vertically integrated Manganese and Silicon (Mn/Si) specialist, involved in mining, smelting, and trading Powered by sustainable hydro-power, pursuing growth and natural diversification into new commodities like silicon metal 20 years on the ASX,
Slide 5: Company Snapshot
5 COMPANY SNAPSHOT From Oct 2018, OMH was included in the S&P/ASX 300, and S&P/ASX Small Ords indices Issued Shares 738.6 million shares $2.00 Share Price Performance Share Share Price A$ 1.23 $1.50 Metrics (as at 1st 52 weeks Low / High A$ 0.95 / A$ 1.70 $1.00 May 19) Market Capitalization A$ 908 m
Slide 6: Our People
6 OUR PEOPLE Low Ngee Tong Zainul Abidin Rasheed Peter C. Church (OAM) Executive Chairman Independent Deputy Chairman Independent Non-Executive Director Julie Wolseley Thomas Teo Tan Peng Chin Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Jo
Slide 7: Operating Divisions
7 OPERATING DIVISIONS Exploration & Mining Smelting & Sintering Marketing & Trading Bootu Creek - Australia Qinzhou - China (100%) Singapore/China (100%) (100%) Mn alloy: 80kpta Global sales and procurement Manganese ore: 0.8 Mtpa Sinter ore: 300ktpa Manganese ore, Ferrosilicon, Silicomanganese, Fer
Slide 8: Manganese – Turns Iron Into Steel
8 MANGANESE –TURNS IRON INTO STEEL A quick lesson in metals - Mn • Manganese is the 4th most consumed metal behind iron, aluminium and copper. • Brittle, hard, silver-grey metal that looks like iron. Metallurgical • Over 90% of demand comes from steelmaking and cast iron, no suitable substitute for
Slide 9: Silicon
9 SILICON A quick lesson in metals - Si • Silicon in the form of quartz is the second most abundant mineral in the earth’s crust. • Very energy intensive to smelt. Metallurgical • Deoxidizer in steel making, especially in specialty steels for motors and transformers. • Added to steel making in the f
Slide 10: OMH Is a One-Stop Source of Crucial Ferroalloys
10 OMH IS A ONE-STOP SOURCE OF CRUCIAL FERROALLOYS TO TOP REGIONAL AND GLOBAL STEELMAKERS Our Customers: China Steel Corporation (Taiwan) Erdemir (Turkey) Formosa Ha Tinh Steel (Vietnam) Gerdau (Americas) Hyundai Steel (South Korea) JFE Steel Corporation (Japan) JSW (India) Liberty OneSteel (Austral
Slide 11: Smelting: Raw Materials to Critical Additives
11 SMELTING: RAW MATERIALS TO CRITICAL ADDITIVES Manganese Ore - Mn High Purity Quartz - Si Products Ferro-Manganese Silico-Manganese Ferro-Silicon Metallic Silicon Under Development Customers Steel Mills Foundries Chemicals / Solar / Electronics Used in: Crude and Specialty Steels Cast Products • C
Slide 12: Our Materials
12 OUR MATERIALS MINING - SMELTING - TRADING
Slide 13: Bootu Creek, Northern Territory, Australia
13 BOOTU CREEK, NORTHERN TERRITORY, AUSTRALIA Revenue contribution of A$229.1m in 2018, +68% year on year OM Manganese Ltd (“OMM”) - 100% Owned Mine: Bootu Creek Location: Northern Territory, Australia Product: ~36% Grade Siliceous Manganese Ore Capacity: Ore production 0.8 million mt per annum, Ult
Slide 14: Bootu Creek, Northern Territory, Australia
14 BOOTU CREEK, NORTHERN TERRITORY, AUSTRALIA $10 44% Grade Mn Ore Index $8 (Fastmarkets MB) US$/dmtu $6 $4 $2 $0 Pyrolusite and cryptomelane in a silica rich gangue within the supergene zone, above a Rhodochrosite and Braunite unweathered protore.
Slide 15: Sarawak's Hydro-Electric Plants
15 SARAWAK’S HYDRO-ELECTRIC PLANTS Bakun Dam, image courtesy of Sarawak Energy Bhd. 3.3 GW Powering our Future 3.3 GW is the installed capacity of Bakun and Murum dams. Source: https://www.sarawakenergy.com/
Slide 16: Samalaju Industrial Park: Asia's New Smelting Hub
16 SAMALAJU INDUSTRIAL PARK: ASIA’S NEW SMELTING HUB Sarawak, Malaysia ◦ Culturally diverse state, unique demographics ◦ Low population density ◦ Stable operating environment Sarawak Corridor of Renewable Energy (SCORE) ◦ Samalaju Industrial Park - supported by 3.3GW* of hydropower OM SARAWAK Samala
Slide 17: Greenfield In-House Developed Smelting Plants
17 GREENFIELD IN-HOUSE DEVELOPED SMELTING PLANTS OM Qinzhou – 100% Owned Location: Guangxi, China Product: HCFeMn, Sinter ore Furnaces: 2 x 16.5 MVA furnaces, 1x 3.5 MVA furnace Capacity: 80ktpa of HCFeMn, 300ktpa of Sinter ore OM Sarawak – 75% Owned Location: Sarawak, Malaysia Product: FeSi, Mangan
Slide 18: Smelting – At the Heart of What We Do
18 SMELTING – AT THE HEART OF WHAT WE DO A$859.1m in segment revenue, five-years from construction contract Essential to Steel • No known Substitutes • Cannot be Recycled
Slide 19: OM Sarawak – Delivering on a US$500 Million Promise
19 OM SARAWAK – DELIVERING ON A US$500 MILLION PROMISE Taken during the challenging 2015-2016 period, this image shows two furnace melt shops (housing 4 furnaces) being constructed. Up to 6 furnaces were concurrently in live production during this period.
Slide 20: OM Sarawak – December 2018
20 OM SARAWAK – DECEMBER 2018 • 16 Electric Arc Furnaces • In full production Jun 2018
Slide 21: Smelting Is Power Intensive
21 SMELTING IS POWER INTENSIVE FeSi Production Cost Comparison Power Quartz Sarawak Coke Iron Units Others Logistics China Export Tax Lowest Quartile Producer • Structural Cost Advantage • Sustainable Hydro-power * Chinese production costing based on research by CNFEOL (Sep 2017). Costing adjusted t
Slide 22: Solid Fundamentals to Weather the Commodity Cycle
22 SOLID FUNDAMENTALS TO WEATHER THE COMMODITY CYCLE $2,500 Alloy Prices in Asia $2,000 FeSi US$/mt $1,500 $1,000 $500 SiMn Source: CRU Jan 09 Jan 11 Jan 13 Jan 15 Jan 17 Jan 19 Competitive Hydro Power Sustainability Strategic Flexibility • 20-year Power Purchase • Sustainable and clean energy • Mod
Slide 23: Sarawak Smelter: Earnings Driver
23 SARAWAK SMELTER: EARNINGS DRIVER Group EBITDA $400 Smelting $350 Mining Associates $300 Trading $250 D&A Others Thousands A$ $200 $150 $100 $50 $0 2017 2018 -$50
Slide 24: Supply Evolution of Asian Markets
24 SUPPLY EVOLUTION OF ASIAN MARKETS Imports of Manganese Alloys in Japan, Korea, Taiwan 700 600 South Africa 500 South Korea 400 Ukraine kpta Australia 300 Malaysia 200 India China 100 0 2007 2006 2008 2009 2012 2014 2015 2018 2010 2011 2013 2017 Source: International Manganese Institute 2016
Slide 25: Strategy and Actions
25 STRATEGY AND ACTIONS Strategy Actions • Early risk diagnosis, planned • Successfully launched Before for diversification Sarawak smelter 2017 • Secure competitive power • Organic expansion • Secured additional power • Go up the value chain • Tailings retreatment ~250ktpa 2018 - • Sarawak sinterin
Slide 26: Financial Highlights
26 FINANCIAL HIGHLIGHTS First dividend after Sarawak smelter investment, sustainable growth a key target. A$’million 2015 2016 2017 2018 Revenue 338.5 414.2 988.2 1,510.4 Adjusted EBITDA* (37.6) 35.0 186.1 339.5 Profit/(Loss) after tax (125.0) (33.5) 91.4 184.7 Borrowings 570.1 617.6 510.7 512.9 Bor
Slide 27: Simultaneously miner and smelter, best exposure to Mn/Si
27 • Simultaneously miner and smelter, best exposure to the Mn/Si basic material space • Unlike other operators, have fished from the same Mn/Si pond for 25 years • Regional leader, assured lowest quartile producer run on hydro-power • A concrete vision of our future which includes silicon metal and
Slide 28: OM Holdings Limited
28 OM HOLDINGS LIMITED AUSTRALIA • CHINA • JAPAN • MALAYSIA • SINGAPORE • SOUTH AFRICA