Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — Australian Shareholders' Association Investor Conference 2021
27 slides from Fortescue's conference presentation, May 31, 2021
Slide 1: ASX cover letter: ASA Investor Conference presentation
For personal use only 31 May 2021 The Companies Officer Australian Securities Exchange Ltd Level 40, Central Park 152-158 St Georges Terrace Perth WA 6000 Dear Madam or Sir PRESENTATION – AUSTRALIAN SHAREHOLDERS’ ASSOCIATION INVESTOR CONFERENCE Fortescue Metals Group Ltd (ASX: FMG) advises that Eliz
Slide 2: ASA Investor Conference
For personal use only ASA Investor Conference Elizabeth Gaines, CEO 31 May 2021 1
Slide 3: Important Notice and Forward Looking Statements Disclaimer
Forward Important Notice The purpose of this presentation is to provide general information about Fortescue Metals Group Ltd (“Fortescue”). It is not recommended that any person makes any investment decision in relation Looking For personal use only to Fortescue based on this presentation. This pres
Slide 4: Rapidly evolving into a resources and renewable energy company
Fortescue Rapidly evolving into a resources and renewable energy company Flywheel For personal use only 3
Slide 5: Integrated mine to market infrastructure
Integrated mine to market infrastructure For personal use only >1.5 bn tonnes shipped since 178-182 mtpa shipping rate first shipment in 2008 3 mining hubs 5 berths One under development Herb Elliott Port 8 ore carriers 260,000t capacity each, >760 Fastest, heavy haul km supported by innovative rail
Slide 6: Safety and unique culture
Safety and unique culture Unwavering focus on health and safety of the Fortescue family For personal use only Values and culture Total Recordable Injury Frequency Rate Empowering all team members to take 9.2 control and look out for their mates 7.6 Led by leaders 6.0 5.1 Setting up their teams for s
Slide 7: March 2021 quarter highlights
March 2021 quarter 2.2 US $143 For personal use only highlights TRIFR /dmt 8% improvement from Average revenue, 2.4 at 30 June 2020 86% of 62% Fe index 42.3 mt shipped US $14.90 /wmt In line with Q3 FY20 C1 cost US$13.45/wmt YTD US $1.5bn US $1.0bn Issue of Unsecured Senior Net debt Notes to refinan
Slide 8: H1 FY21 highlights
H1 FY21 highlights $9.3bn $6.6bn For personal use only US US Revenue Underlying EBITDA at a 71% margin US $4.1bn US $4.4bn Net profit after tax Net operating cashflow US $1.33 A $1.47 Earnings per share Interim dividend, (A$1.84) payout ratio of 80% 7
Slide 9: Focus on margins: generating strong margins through the cycle
Focus on Generating strong margins through the cycle margins For personal use only Prices and EBITDA margin (US$/dmt) Underlying EBITDA Realised price 62 Platts CFR Index Average Underlying EBITDA Average realised price 140 120 100 80 80 60 40 52 39 20 30 21 20 0 FY16 FY17 FY18 FY19 FY20 H1 FY21 8
Slide 10: Disciplined capital allocation
Disciplined capital allocation For personal use only Aggregate earnings and cashflows FY14 – H1 FY21 Includesshare 11Includes share buyback, buyback as at 18 February 2021 Frompeak 22From peakdebt debt of of US$12.7 US$12.7 billion billion at 30 June 2013, including including lease lease payments pa
Slide 11: Capital returns a priority
Targeting the top end of the dividend Capital returns policy to payout 50-80 per cent of full year a priority net profit after tax For personal use only Dividends (A$/share) and payout ratio (%) 2.00 77% 0.9 78% 1.76 80% 1.80 0.8 1.60 0.7 1.47 62% 1.40 0.6 52% 1.14 1.20 0.5 1.00 38% 36% 0.4 0.80 0.3
Slide 12: Global steel demand recovers
Global steel demand recovers For personal use only Resulting in higher steel prices and incentivising crude steel production Global HRC prices Global crude steel production China monthly pig iron output USD/t (mt) (mt) 2000 110 80 1800 100 75 1600 1400 70 90 1200 65 1000 80 800 60 70 600 55 400 60 5
Slide 13: Robust demand for iron ore
Robust demand for iron ore For personal use only Declining port stocks supported by steel destocking and crude steel production rates China monthly iron ore imports by origins (mt) China port stocks by products (mt) China import iron ore inventory (mt) 120 170 180 160 150 160 100 160 140 140 150 80
Slide 14: Fortescue's Q3 average realised price
Fortescue’s Q3 average realised price Strong US$143/dmt, 86% of the Platts 62% CFR index realisations For personal use only $166.9 $133.7 $118.2 $102.0 $93.3 $89.0 $82.7 Jan 19 Apr 19 Jul 19 Oct 19 Jan 20 Apr 20 Jul 20 Oct 20 Jan 21 62% CFR Platts Quarterly Platts Price SSF (Portside) FB (Portside)
Slide 15: Multifaceted relationship with China
Multifaceted relationship with China For personal use only China produces more than half of global steel1 Share of world crude steel production1 Supplier First shipment to China in 2008 22% Procurement Over US$1 billion procurement from China 3% 5% 57% Investment and funding 6% Significant sharehold
Slide 16: Iron Bridge Magnetite Project
Completion of 12-week technical Iron Bridge and commercial assessment in Magnetite Project For personal use only May 2021 US$3.3 – US$3.5bn Capital estimate 67% Fe High grade magnetite concentrate product 22 mpta First production by December 2022 US$33 – US$38/wmt Competitive C1 cost Photo: Iron Bri
Slide 17: Approach to Sustainability
Approach to Sustainability We are a global force, committed to empowering thriving communities For personal use only Setting Safeguarding the Creating positive high standards environment social change Employee health and safety Climate change action and Creating employment and disclosure busin
Slide 18: Protecting Aboriginal heritage
Protecting Detailed processes for Aboriginal heritage engagement and heritage For personal use only management Seven agreements with Native Title Groups Heritage avoidance Primary objective ~6,000 heritage sites Protected and avoided 2.7 million ha of land Ethnographically surveyed 17
Slide 19: Creating positive social change
Creating positive Building thriving communities and empowering Aboriginal people social change For personal use only through training, employment and business development 900 jobs to Aboriginal people via VTEC since 2006 Fortescue’s Trade Up Providing an accredited pathway to a trade qualification B
Slide 20: Joining the battle against climate change
Joining the battle An ambitious, industry leading against climate change emissions reduction target For personal use only Carbon neutrality by 2030 Decarbonisation pathway Energy infrastructure to increase use of renewables Technology and innovation Hydrogen and battery electric solutions Fortescue
Slide 21: Pathway to decarbonisation
Pathway to decarbonisation Underpinned by practical initiatives that will deliver goals in an For personal use only economically sustainable manner Chichester solar gas Pilbara Energy Connect Green fleet hybrid project f US$100 million investment by Australia’s largest remote A$32m Christmas C
Slide 22: Renewable energy driving new green industries
Renewable energy driving For personal use only new green industries Global leader Driving the green energy and product industry to transition away from fossil fuels Developing Renewable energy and green industry opportunities globally Funding Allocating 10% of net profit after tax to FFI, project fi
Slide 23: Fortescue Future Industries Flywheel
Fortescue Future Industries Flywheel For personal use only 22
Slide 24: FY21 guidance
FY21 guidance For personal use only 178 – 182 mt Iron ore shipments US$13.50 – US$14.00/wmt C1 cost based on assumed exchange rate of AUD:USD 0.75 US$3.5 – US$3.7 billion Capital expenditure 23
Slide 25: Our strategic focus
Our strategic focus Sustainability For personal use only Underpinned by operational excellence and balance sheet strength Ensuring communities benefit from Fortescue’s success Optimising Returns and growth from our operations Diversifying Commodities that support decarbonisation Pursuing Gre
Slide 26: Our Purpose and Values
For personal use only Our Purpose Thriving communities | Global force Fortescue’s Values
Slide 27: Fortescue
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Fortescue Metals Group — Australian Shareholders' Association Investor Conference 2021 on 6ix