Igo Limited · ASX:IGO
Igo — Investor Day (September 2024)
55 slides from Igo's investor day presentation, Sep 12, 2024
Slide 1: Strategy Day Presentation ASX Release
ASX RELEASE 12 SEPTEMBER 2024 STRATEGY DAY PRESENTATION IGO Limited (ASX: IGO) (IGO or the Company) is hosting its 2024 Strategy Day today in Sydney. A copy of the presentation materials which will be used can be found attached. Commenting on the Company’s new strategy, Managing Director and Chief E
Slide 2: IGO's path to 2035
Discover | Develop | Deliver IGO’s path to 2035 IGO Limited | 12 September 2024
Slide 3: Contents
Contents Market Context 4 Our strategy has been based on analysis of key markets and the critical implications we have considered Purpose & Strategy 14 How we will deliver value to all stakeholders Delivering the Strategy 21 Themes and our competitive advantages that will drive our success Summary 4
Slide 4: Background
Background Context of our new strategy Our strategy has been reassessed in response to changing commodity markets, new leadership and our evolving portfolio We have developed a strategy that: • Leverages IGO’s distinct advantages • Defines an aspirational but realistic Strategy development has invol
Slide 5: Market Context
Market Context Section 1 2 3 4 IGO Limited | Strategy Update Page 4
Slide 6: Global Energy Transition & Electrification
Global Energy Transition & Electrification EV transition is already underway and will accelerate as adoption challenges are addressed EV adoption is significantly advanced in China with Westerns markets playing catch up EVs have a critical role to play in enabling the energy transition – Market shar
Slide 7: Battery Materials
Battery Materials Lithium, nickel and copper are the major value pools in the battery materials sector Battery Raw Materials Market Value Pool (US$bn p.a.) 3 Batteries will be fundamental to the energy transition, particularly for EVs which will require significant raw materials 2023A 2035E 35 inclu
Slide 8: EV market development
EV market development Each major geography will likely progress at different rates based on various external drivers 1 Global EV Sales limited 2 Global EV Sales 3 Potential for EVs to 4 Global EV Sales increasingly forced by Supply, including limited by Demand. surpass ICE on all by political mandat
Slide 9: EV uptake & industry competitiveness
EV uptake & industry competitiveness We observe two distinct market settings and different drivers of maturity Manufacturing Deployed capital, Other external factors Less domestic and industry affecting the EV take-up Independent skills, value chain oil/gas supply development hydrocarbon and industr
Slide 10: Geopolitics and government policy
Geopolitics and government policy Subsidies and tariffs are not sufficient to sustainably alter industry economics Our Observation Implication The global trade policy position is fluid but subsidies or We will build our business around fundamentals, focusing on market access controls which offer cer
Slide 11: Lithium
Lithium Current market conditions create a window of opportunity as the world’s need for lithium matures, however cost positioning is paramount Lithium is a commodity like no other and is critical to all major Lithium demand (Millions of tonnes) commercial EV battery chemistries. 14% EV Significant
Slide 12: Copper
Copper Strong market fundamentals following several years of underinvestment in new supply Copper is fundamental to the energy transition, which will drive Copper demand and supply (Millions of tonnes) an increasing proportion of copper demand as electrification Transport Grid Other Supply gathers p
Slide 13: Nickel
Nickel Indonesia has structurally changed the global nickel market. Cost positioning is critical. Nickel demand and supply (Millions of tonnes) Indonesian laterites have changed the global industry structure, but supply growth has slowed. Rest of world supply 4.4 4.4 4.3 4.4 4.5 4.5 4.5 Indonesia su
Slide 14: Our Beliefs
Our Beliefs Our strategy is based on core beliefs backed by considerable analysis which we will continue to test over time Li Lithium Cu Copper Li Nickel › There is a window to create value in › Copper is critical for the energy › Incentive price has moved lower, lithium, but cost competitiveness is
Slide 15: Purpose & Strategy
Purpose & Strategy Section 1 2 3 4 IGO Limited | Strategy Update Page 14
Slide 16: Our Purpose
Our Purpose Remains unchanged and is relevant, engaging and core to our future Making a Our work is making fundamental changes to the way communities all Difference. around the world grow, prosper and stay sustainable. Our teams are finding and producing the products that will make energy storage mo
Slide 17: Our Journey
Our Journey Our evolution over more than 20 years has given us a distinct and unique advantage Where we’ve come from What we’ve delivered Adapted and evolved our strategy Initially base metals & gold, transitioning to clean energy metals Built deep operational capability Successful operations at Lon
Slide 18: Our Strategy on a Page
Our Strategy on a Page We have an exceptional base of capability to leverage as we work towards our 2035 vision Purpose We have conviction on our 2035 portfolio … Exploration Development Operations Commercial Cu Cu Cu Li Ni Li Ni Li Ni Li … and our strategic themes will govern how we make a differen
Slide 19: Our 2035 Portfolio
Our 2035 Portfolio We have a clear view on where we want to play in the battery materials sector, and partnering closely via TLEA for Lithium Upstream mining with carefully constructed downstream exposure Our future portfolio Exploration Development Operations Commercial Li Copper / Nickel Li Copper
Slide 20: Portfolio diversification
Portfolio diversification We believe in the benefits of having a diversified portfolio Global GDP vs Lithium, Copper & Nickel Prices Rebased to 100 Lithium is a nascent and fast-growing market with demand 400 driven by the battery market, which is expected to result in Lithium Price more price varia
Slide 21: Strategic Themes
Strategic Themes We have defined four key themes which will define the work we need to do to deliver To create a pipeline of projects To enable IGO and our TLEA joint Create market conditions where The IGO Playbook will capture that either progress to venture to act more quickly and the products fro
Slide 22: Strategic Objectives
Strategic Objectives Prioritised our key objectives over three distinct time horizons • Maximise the potential of our lithium business through the TLEA Joint Venture • Work with our partners to optimise Greenbushes and define full potential for this asset • Develop a clear view on lithium market and
Slide 23: Capital Allocation
Capital Allocation Clear framework to allocate capital with discipline Operating Cash Flow External Capital from Safe and Reliable Operations (Debt and Equity) FY24 Dividend declaration was consistent with this framework Sustaining Maintenance Investment in Organic Inorganic Exploration Capital of D
Slide 24: Delivering the Strategy
Delivering the Strategy Section 1 2 3 4 IGO Limited | Strategy Update Page 23
Slide 25: Preparing for growth
Preparing for growth Significant achievements in last 8 months TRIFR rates have reduced from 16.0 to 10.4. Strong focus on proactive safety Enhanced safety performance leadership Transitioned safely to care and maintenance given project challenges and change in Made a decisive call on Cosmos market
Slide 26: Safety
Safety Improving safety performance remains our highest priority Lag Safety Performance1 10 20.2 22 TRIFR has reduced over recent time but remains higher 9 17.7 16.5 than desired 8 16.0 17 7 12.7 12.0 12.1 6 10.4 12 5 We are strengthening our safety culture and leadership capability through educatio
Slide 27: Sustainability
Sustainability Delivering our strategy will rely on the trust we hold with all of our stakeholders Unique culture, outstanding people and a strong focus on safety, diversity, inclusion and care Committed to managing our climate and nature-related risks and opportunities - Net Zero Scope 1 and 2 emis
Slide 28: Emissions
Emissions Committed to reducing emissions through renewables, storage and selective abatement and offset Nova Net Zero Roadmap Nova experience has set us up well for future projects, with 27% reduction in emissions targeted 70,985 from 2019 baseline to present (20% achieved by 30 56,455 June 2024) 5
Slide 29: Our Culture
Our Culture Our culture is a key enabler, connecting our strategy and purpose Employee insights inform our decisions, shape our strategies and help to foster a more inclusive culture and work environment Our culture is grounded on care, fostering curiosity and bringing the best out of our people Del
Slide 30: Executive Leadership Team
Executive Leadership Team The right management team to deliver the refreshed strategy IVAN VELLA KATHLEEN BOZANIC BRETT SALT Managing Director & Chief Chief Financial Officer Chief Growth and Commercial Executive Officer Officer 25 years industry experience, 30 years' experience in Extensive executi
Slide 31: TLEA Joint Venture
TLEA Joint Venture Our joint venture with Tianqi Lithium Corporation Global Joint Venture (ex-China) gives IGO a unique market position in a partnership with a leading lithium market participant in Tianqi Lithium 49% 51% Significant opportunity for IGO and TLC to bring their distinct skills and expe
Slide 32: Greenbushes
Greenbushes The world’s largest and lowest cost hard rock lithium mine 2Q24 – SC6 Cost Curve (C1) FY24 Production Results: • Spodumene Concentrate Production:1.38Mt (SC6) 1,400 • Cash Costs (production): $US330/t 1,200 • EBITDA Margin: 85% 1,000 USD per tonne Clear pathway to 2.0Mt installed process
Slide 33: Greenbushes
Greenbushes Seeking to get the best out of this world class ore body Greenbushes cash costs, realised price & EBITDA margin EBITDA Margin Focused on optimisation to improve productivity, reduce costs 62% 55% 78% 75% 88% 88% 92% 93% 91% 89% 74% 68% and enhance margins 5,783 6,000 5,431 5,000 3,984 En
Slide 34: Kwinana
Kwinana Supporting TLEA to improve production performance from Train 1 Train 1 - Lithium Hydroxide Production (Quarterly) Performance improved in FY24 with increased reliability, availability and operating control 1400 TLEA are progressively solving the technical issues we have 1200 encountered thro
Slide 35: Nickel Business
Nickel Business Laser focused on safe, stable production and cash maximisation at Nova Nova Nova Nickel Production (tonnes contained) First quartile cost position underpins strong free cash flow until end of life 20,000 18,000 Team are focused on opportunities to reduce costs and 16,000 ? accelerate
Slide 36: Exploration
Exploration We have refocused our exploration capability to drive commercial success and returns Tenure People Relationships Tools Large and highly prospective tenement Highly experienced team Strong and collaborative package across belt Proprietary tools, with diverse skills across relationships wi
Slide 37: Exploration
Exploration Extensive portfolio from which to drive future value IGO Limited | Strategy Update Page 36
Slide 38: Exploration
Exploration Integrated strategy to deliver sustained, repeatable success New agile methodology and • Cross functional teams and disciplines to ensure regular gating and prioritisation team structure • Clear accountability for project execution • Fail fast mindset New gate-to-gate process • Reshaped
Slide 39: Commercial
Commercial We are developing a commercial capability focused on lithium Lithium Hydroxide Production Flowsheet Ore Beneficiation Relative immaturity of lithium market means price transparency, price (Crushing, grinding, DMS, Mag sep, Gravity sep, flotation Tails formation and ‘value-in-use’ concepts
Slide 40: Capital Allocation
Capital Allocation Clear framework to allocate capital with discipline Operating Cash Flow External Capital from Safe and Reliable Operations (Debt and Equity) FY24 Dividend declaration was consistent with this framework Sustaining Maintenance Investment in Organic Inorganic Exploration Capital of D
Slide 41: Financial Performance
Financial Performance Well capitalised to deliver our 2035 Vision Units FY24 Strong balance sheet position including $720M Revenue A$M 841 undrawn debt Share of Net Profit of TLEA A$M 553 Underlying NPAT1 A$M 319 Net Profit After Tax A$M 3 Corporate cost structure reset to reflect our changing busin
Slide 42: Financial Performance
Financial Performance IGO has a track record of delivering quality earnings and cash returns Dividend History (A$M) Dividends vs Underlying FCF (A$M) 0 1,200 1,200 60% 1,074 1,098 51% 0 1,000 1,000 50% 794 39% 0 800 800 40% 713 0 600 600 30% 24% 560 21% 21% 0 400 400 20% 234 363 311 312 158 280 0 20
Slide 43: Priorities
Priorities We have a clear view on how we can succeed, ensuring we are disciplined and focused on returns Li Lithium Cu Copper Li Nickel › Through TLEA we will build a business › We will be very disciplined on › We will maximise value from Nova that is lean and agile to meet the inorganic opportunit
Slide 44: Summary
Summary Section 1 2 3 4 IGO Limited | Strategy Update Page 43
Slide 45: Summary
Summary Discover | Develop | Deliver – Our path to 2035 Focus on battery materials, Lithium is our core focus, underpinned by our interest in the world’s best hard-rock particularly lithium lithium mine at Greenbushes. Copper and nickel remain on strategy but with a clear understanding of the market
Slide 46: Our Unique Value Proposition
Our Unique Value Proposition We have a distinct set of credentials to deliver our strategy Greenbushes delivering strong free cash flow through the Our deep exploration cycle and significant capability and unique opportunity for Our track record of opportunity for optimisation operational growth thr
Slide 47: Cautionary Statements & Disclaimer
Cautionary Statements & Disclaimer • This presentation has been prepared by IGO Limited (“IGO”) (ABN Persons' Statements included in periodic and continuous • Lithium cash costs (production) are reporting inclusive of mining, 46 092 786 304). It should not be considered as an offer or disclosure ann
Slide 48: Appendix
Appendix IGO Limited | Strategy Update Page 47
Slide 49: Board of Directors
Board of Directors Strong governance from a Board that continues to evolve MICHAEL NOSSAL IVAN VELLA KEITH SPENCE Non-Executive Chairman Managing Director & Chief Non-Executive Director Executive Officer Sustainability Tenure: 4 years in Tenure: 10 years in December 2024 Tenure: 9 months December 20
Slide 50: Commercial
Commercial Develop our commercial capability in lithium through our partnership with TLEA Commercial IGO seeks to maximise value for produced tonnes and contribute to the development of the lithium industry. To achieve this we: • Must develop appropriate views and skills to shape the industry Indust
Slide 51: Technical
Technical Develop our IP and capability in building projects fast, with low capital intensity and optimised flow sheets Technical IGO seeks to optimise the speed and cost of project development, through technical capability. To achieve this we: • Must develop our IP and capability in building with h
Slide 52: Partnerships
Partnerships Continue to develop our lithium focused joint venture TLEA and seek other strategic partners to share risk & return Partnerships IGO will continue to seek strategic partners to share risk and return. To achieve this we: • Further develop our lithium focused TLEA joint venture, and • See
Slide 53: Playbook
Playbook Differentiating IGO - the interconnected way we work & create value to achieve the expectations of our stakeholders Playbook IGO seeks to differentiate itself as the developer and operator of choice for battery materials. To achieve this we: • Must have exceptional business discipline, and
Slide 54: Contact
Contact Investors & Media Richard Glass Head of Corporate Affairs & Investor Relations T:+6 8 9238 8300 E: Richard.glass@igo.com.au IGO Limited | Strategy Update
Slide 55: Making a Difference
Making a We believe in a world where people power makes How? Developments in battery storage technology amazing things happen. are enabling the full potential of renewable energy to be realised, by allowing energy produced from the Where technology opens up new horizons and clean sun, wind and other