Yancoal Australia Ltd. · ASX:YAL
Yancoal Australia — Investor Presentation (November 2018)
38 slides from Yancoal Australia's investor presentation, Nov 24, 2018
Slide 1: Australia's Largest Pure-Play Coal Producer
Australia’s Largest Pure-Play Coal Producer Investor Presentation November, 2018
Slide 2: Table of Contents
Table of Contents Section 1 Introduction 4 Section 2 Key Investment Highlights 8 Section 3 Financial Overview 18 Appendix A Yancoal’s History 21 Appendix B Supplementary Information 24 1
Slide 3: Disclaimer
Disclaimer The information contained herein has been prepared by representatives of Yancoal Australia Ltd (the “Company”) solely for informational purposes and does not constitute any recommendation or form the basis for any investment decisions regarding the securities of the Company. You must, and
Slide 4: Disclaimer (Continued)
Disclaimer (Continued) You should note that this presentation contains pro forma historical financial information. The pro forma historical information provided in this presentation is for illustrative purposes only and is not represented as being indicative of Yancoal’s views on its future financia
Slide 5: Introduction
(AYANCOAL FARK A A IR A i Introduction
Slide 6: Offer Summary
Offer Summary Issuer • Yancoal Australia Limited (ASX: YAL) (“Yancoal” or the “Company”) • Dual Primary Listing on the Hong Kong Stock Exchange Listing Exchange • Stock code: 3668 Indicative Offer • HK$23.48 – HK$25.84 per share Price Range • Represents A$4.09 – A$4.50 per share based on AUDHKD exch
Slide 7: Company Overview
Company Overview We are Australia’s largest pure-play coal producer primarily servicing Asia’s power generation industry Yancoal Saleable Production Profile Capitalisation Summary (Pre Raise) Attributable Basis (Mt) A$ US$(3) 40.0 Exchange Listing ASX Share Price as at 20 November 2018 ($/sh)(1) 3.1
Slide 8: Flagship Assets Portfolio Overview
Portfolio Overview A diversified portfolio of world-class coal assets comprising interests in 9 mines with supporting rail and port infrastructure Yancoal’s Portfolio Asset Overview(1) Saleable Production Marketable South Location Ownership Reserves(3) Resources(4) (CY17)(5) (1H18) Abbot Point Bowen
Slide 9: Key Investment Highlights
(AYANCOAL FARK A A IR A i Key Investment Highlights
Slide 10: Key Investment Highlights
Key Investment Highlights 1 Australia’s largest pure-play coal producer and once listed, the largest HKSE-listed exporter of high quality seaborne thermal coal 2 World class large-scale coal mines which produce high value export coal and operate at industry-leading cash margins 3 Long-term susta
Slide 11: Australia's Largest Pure-Play Coal Producer
1 Australia’s Largest Pure-Play Coal Producer Australia’s largest pure-play coal producer with a seaborne business focused on major Asian export markets including the PRC Largest Pure-Play Coal Producer in Australia by Marketable Reserves and Production CY17 Coal Reserves in Australia, 100% Basis (M
Slide 12: One of The Largest HKSE-Listed Exporters of Coal
1 One of The Largest HKSE-Listed Exporters of Coal(1) We offer HKSE investors a differentiated investment proposition focused around delivering high quality export coal Our Investment Proposition Relative to HKSE-Listed Peers Largest HKSE-Listed Exporter of Coal(1) Seaborne Coal Production in 2017,
Slide 13: World Class Mines Producing High Value Coals
2 World Class Mines Producing High Value Coals Our thermal coal brand is well regarded by consumers for its high energy content which allows us to secure favourable pricing Power generators are focused on improving thermal efficiency… …which is driving demand for our high energy product(1) Note: bub
Slide 14: Industry-leading Cash Margins
2 Industry-leading Cash Margins Significant scale, a relentless focus on driving asset performance and premium pricing for our coal products allows us to operate at industry-leading cash margins Continued Focus on Driving Performance of Our Asset Base Significant Scale Drives Efficiency, Performance
Slide 15: Long-term Sustainable and Disciplined Capital Structure
3 Long-term Sustainable and Disciplined Capital Structure Our balance sheet has materially strengthened in recent years which provides a platform for future growth and further returns to shareholders Our Approach to Capital Structure Debt Structure by Maturity A$MM Balance sheet materially strengt
Slide 16: Sustainable Platform for Growth
3 Sustainable Platform for Growth Large, high quality reserve and resource base located in a low risk jurisdiction – underpins current and anticipated production levels whilst also supporting future growth opportunities Significant Reserve and Resource base (as at 30 June 2018) Organic growth initia
Slide 17: Experienced Management Team
4 Experienced Management Team Management team consists of executives with deep experience in the coal sector and the financial sector, with track record of success Baocai Zhang, Chair of the Board Fucun Wang, Chair of the Executive Committee • Chair of the Board since June 2018 • CEC since Jun 2018
Slide 18: Strong Relationships With Key Stakeholders
5 Strong Relationships With Key Stakeholders Valuable and strategic operational and trade relationships as well as strong support from key shareholders Key Shareholders • Yanzhou is one of the leading underground coal • Cinda is one of the leading coal investors in the PRC producers in the PRC – Mad
Slide 19: Financial Overview
• Section 3 Financial Overview
Slide 20: Key Operating and Financial Metrics
Key Operating and Financial Metrics Saleable Production Coal Revenue by Customer(2) Operating EBITDA Mt A$MM A$MM 40 6,000 34.0 2,500 5,000 4,500 1,960 30 5.2 2,000 4,000 19.3 2,623 1,500 20 3,000 3.8 988 12.1 28.8 2,000 1,000 1,199 10 3.3 15.5 1,000 500 8.8 172 0 0 (1) (1)(6) 2016 2017 1H18 Ann. 0
Slide 21: Key Operating and Financial Metrics (Continued)
Key Operating and Financial Metrics (Continued) Operating EBITDA Margin Net Cash (Used in) / Generated from Operating Activities Profit / (Loss) Before Tax Margin % A$MM % 35.0% 60.0% 1,800 23.0% 1,500 1,424 12.9% 45.0% 41.8% 38.0% 1,200 900 0.0% 30.0% 600 408 13.9% 300 15.0% - (25.2%) (24) (35.0%)
Slide 22: Appendix A: Yancoal's History
Appendix A: Yancoal’s History
Slide 23: History and Key Milestones
History and Key Milestones Since our incorporation in 2004, we have grown through a series of successful M&A transactions and organic initiatives Yancoal acquired 100% of Felix Yancoal acquired Gloucester Coal Yancoal completed Yancoal acquired a Yancoal announces Resources (ASX:FLX), which (ASX:GCL
Slide 24: Coal & Allied Acquisition Recap
Coal & Allied Acquisition Recap Transformational acquisition by Yancoal, creating Australia’s largest pure-play coal producer • Yancoal successfully completed the acquisition of Coal & Allied from Rio Tinto in September 2017 – Total consideration of US$2.45 billion in cash, US$240 million in non-con
Slide 25: Appendix B: Supplementary Information
Appendix B: Supplementary Information
Slide 26: 1H CY18 Results Update
1H CY18 Results Update Yancoal’s transformational acquisition of 100% of C&A from Rio Tinto drove immediate production and financial gains Half-Year Ended Half-Year Ended Full Year Ended Full Year Ended Profit Result (A$MM) June 2018 June 2017 December 2017 December 2016 Revenue from Continuing Oper
Slide 27: Organisational Structure
Organisational Structure Other Shareholders Yanzhou Management Agreement Yancoal International The Company (Holding) Co. Management Agreement Watagan Mining Company Pty Ltd 100% Mines Coal Export Terminals 100% Asset Asset Asset Ownership Asset Ownership Cameby Hunter Valley Austar 51% Downs Operati
Slide 28: Reserves and Resources By Mine
Reserves and Resources By Mine As at 30 June 2018, Yancoal has Coal Reserves of 1,710Mt, Marketable Coal Reserves of 1,218Mt and Coal Resources of 8,327Mt (on 100% basis) • On an attributable basis, Yancoal’s Coal Reserves were 1,178Mt, Marketable Coal Reserves were 837Mt and total Coal Resources (m
Slide 29: Summary of Yancoal's Product Suite
Summary of Yancoal’s Product Suite Hunter Valley Queensland Low Ash Thermal High Ash Thermal SSCC PCI Coking Coal Calorific Value kcal / kg 6,322 <6,322 6,784 6,767 NA Ash % ≤15 >15 9.5 11.5 10 Total Moisture % 10 10 10 9 10 Fixed Carbon % 53 53 52 77.8 69.5 Sulphur % 0.55 0.55 0.65 0.68 0.43 Phosph
Slide 30: Hunter Valley Operations
Yancoal Other JV Watagan Hunter Valley Operations Owned & Operated Interests Mines Key Metrics Marketable Coal Production (Mt) (100% basis) (2) Production (Mt) Location New South Wales, Australia 8.0 6.4 Mine Type Open Cut 4.8 4.0 Year of Initial Operation 1949 Ownership (%) 51.0% 0.0 Measured: 704M
Slide 31: Mount Thorley Warkworth
Yancoal Other JV Watagan Mount Thorley Warkworth Owned & Operated Interests Mines Key Metrics Marketable Coal Production (Mt) (100% basis) (2)(3) Production (Mt) Location New South Wales, Australia 8.0 6.0 Mine Type Open Cut 3.9 4.0 Year of Initial Operation 1981 Ownership (%) 82.9% 0.0 Measured: 27
Slide 32: Moolarben
Yancoal Other JV Watagan Moolarben Owned & Operated Interests Mines Key Metrics Marketable Coal Production (Mt) (100% basis) (2) Production (Mt) Location New South Wales, Australia 15.0 12.4 Mine Type Open Cut and Underground 9.3 8.8 6.9 7.5 6.1 Year of Initial Operation 2010 4.3 3.4 Ownership (%) 8
Slide 33: Stratford Duralie (Gloucester)
Yancoal Other JV Watagan Stratford Duralie (Gloucester) Owned & Operated Interests Mines Key Metrics Marketable Coal Production (Mt) (100% basis) (2) Production (Mt) 1.5 1.4 Location New South Wales, Australia Mine Type Open Cut 0.9 0.7 0.7 0.8 Year of Initial Operation 1995 0.5 0.3 0.2 Ownership (%
Slide 34: Yarrabee
Yancoal Other JV Watagan Yarrabee Owned & Operated Interests Mines Key Metrics Marketable Coal Production (Mt) (100% basis) (2) Production (Mt) Location Queensland, Australia 4.0 3.1 2.8 2.9 Mine Type Open Cut 2.0 Year of Initial Operation 1982 1.2 1.3 1.3 1.1 Ownership (%) 100% 0.0 Measured: 94Mt 2
Slide 35: Middlemount
Yancoal Other JV Watagan Middlemount Owned & Operated Interests Mines Key Metrics Marketable Coal Production (Mt) (100% basis) (2) Production (Mt) Location Queensland, Australia 6.0 4.4 4.1 3.9 Mine Type Open Cut 3.0 Year of Initial Operation 2011 2.1 2.0 2.1 1.7 Ownership (%) Around 50.0% 0.0 Measu
Slide 36: Ashton
Yancoal Other JV Watagan Ashton Owned & Operated Interests Mines Key Metrics Marketable Coal Production (Mt) (100% basis) (3) Production (Mt) Location New South Wales, Australia 2.0 1.4 Mine Type Underground and Potential Open Cut 1.2 1.1 1.0 Year of Initial Operation 2005 0.6 0.5 0.4 0.4 Ownership
Slide 37: Austar
Yancoal Other JV Watagan Austar Owned & Operated Interests Mines Key Metrics Marketable Coal Production (Mt) (100% basis) (3) Production (Mt) 2.0 1.9 Location New South Wales, Australia Mine Type Underground 1.1 1.0 0.9 Year of Initial Operation 1916 0.7 0.5 0.4 Ownership (%) 100%(2) 0.1 0.0 Measure
Slide 38: Donaldson
Yancoal Other JV Watagan Donaldson Owned & Operated Interests Mines Key Metrics Marketable Coal Production (Mt) (100% basis) (3) Production (Mt) Location New South Wales, Australia 2.0 1.3 Mine Type Underground 1.0 0.8 Year of Initial Operation 2006 0.2 0.2 Ownership (%) 100%(2) 0.0 0.0 0.0 Measured
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