Fortescue Ltd · ASX:FMG
Fortescue — Q2 2025 Earnings Presentation
36 slides from Fortescue's earnings presentation, Feb 20, 2025
Slide 1: 20 February 2025
20 FEBRUARY 2025 © 2024 FORTESCUE FORTESCUE | 1
Slide 2: Important Notice: Forward Looking Statements
Important Notice The purpose of this presentation is to provide general information about Fortescue Ltd and its subsidiaries (“Fortescue”). It is not recommended that any person makes any investment decision in relation to Fortescue based on this presentation. This presentation contains certain stat
Slide 3: Technology, energy and metals group accelerating decarbonisation of industry
We are the technology, energy and metals group accelerating the commercial decarbonisation of industry, rapidly, profitably and globally. FORTESCUE | 3
Slide 4: Half year highlights
TRIFR of US$1.6bn 1.0 97.1Mt Outstanding safety Record half year iron ore performance shipments Net profit after tax US$19.17/wmt US$2.0bn 65% net debt payout ratio Strong balance sheet to Hematite C1 cost support growth In line with dividend policy FORTESCUE | 4
Slide 5: Safety and unique culture
Safety and unique culture 1.0 TRIFR1 Striving to become a global leader in safety 25% Female employment rate 15% First Nations employment rate across Pilbara operations 1Total Recordable Injury Frequency Rate FORTESCUE | 5
Slide 6: Iron ore shipments, C1 cost and revenue
US$19.17/wmt 97.1Mt Iron ore shipments Hematite C1 cost US$85/dmt 85% Hematite average revenue Hematite average revenue realisation FORTESCUE | 6
Slide 7: Revenue, underlying EBITDA and net profit
US$7.6bn US$3.6bn US$1.6bn Revenue Underlying EBITDA Net profit after tax 48% US$47/dmt1 US$0.51 Underlying EBITDA margin Underlying EBITDA per tonne Earnings per share (A$0.76) 1 Metals Segment FORTESCUE | 7
Slide 8: Cash flow, debt and cash on hand
US$2.4bn US$0.7bn Net operating cash flow Free cash flow US$5.4bn US$3.4bn Gross debt Cash on hand FORTESCUE | 8
Slide 9: Fully franked interim dividend
A$0.50 per share 65% of NPAT A$1.5bn Fully franked interim dividend Dividend payout ratio Value of interim dividend FORTESCUE | 9
Slide 10: FY25 guidance
190 - 200Mt 5 - 9Mt US$700m Iron Bridge Concentrate Energy net operating Total iron ore shipments shipments (100% basis) expenditure US$18.50 - US$3.5 - US$400m US$19.75/wmt US$3.8bn C1 cost for hematite Metals capital expenditure Energy capital expenditure Guidance is based on an assumed FY25 excha
Slide 11: Metals
METALS FORTESCUE | 11
Slide 12: Integrated mine to market infrastructure
Integrated mine to market infrastructure Solar and wind locations are subject to further studies FORTESCUE | 12 and regulatory approvals
Slide 13: Iron Bridge
Iron Bridge 5Mt SHIPPED1 To customers since operations began PORTFOLIO ENHANCEMENT High grade magnetite concentrate SAFE AND EFFICIENT Commissioning and ramp up underway 1Achieved in January 2025 FORTESCUE | 13
Slide 14: Green iron metal roadmap
Green iron metal roadmap Decarbonising across our value chain 5 Vision - 100Mtpa of Green Iron Metal 4 3 Scale up 2 Feasibility Study 1 Pilot Project To commence in 2025 Lab scale Construction underway testing Completed FORTESCUE | 14
Slide 15: Green Metal Project
Artist impression of Green Metal Project GREEN METAL PIT TO INTEGRATED PROJECT PRODUCT SYSTEM Construction underway and Fortescue ore + renewable Utilising existing resources first production targeted 2025 energy + green hydrogen and infrastructure FORTESCUE | 15
Slide 16: Critical minerals and iron ore exploration
Critical minerals and iron ore exploration PILBARA Mindy South, White Knight and Wyloo North AUSTRALIA WA, NSW, SA and QLD INTERNATIONAL Gabon, Argentina, Kazakhstan and Canada FORTESCUE | 16
Slide 17: Culture and First Nations People
Culture and First Nations People A$6.5bn Contracts awarded to First Nations businesses since 20111 >1,500 First Nations people employed through Fortescue’s Vocational Training Employment Centre since 2006 NATIVE TITLE PARTNERS Seven Native Title Agreements CO-MANAGEMENT Collaborative approach to dec
Slide 18: Climate and Decarbonisation
Climate and Decarbonisation REAL ZERO BY 20301 No voluntary carbon offsets NET ZERO SCOPE 3 BY 2040 Eliminating emissions across the value chain DECARBONISATION PLAN Costed plan to eliminate fossil fuels 1Scope 1 and 2 terrestrial emissions target across Fortescue’s Australian iron ore operations FO
Slide 19: Decarbonisation progress
Decarbonisation progress US$1bn REVENUE Fortescue Zero to receive from US$2.8bn Liebherr deal for zero emissions mining equipment XCMG PARTNERSHIP To purchase >100 pieces of zero emissions HME1 100MW SOLAR FARM 1.5GW to be built before the end of the decade 1Heavy Mobile Equipment FORTESCUE | 19
Slide 20: Energy
FORTESCUE | 20
Slide 21: Energy
Energy FORTESCUE ZERO Green technology, products and engineering GREEN ENERGY Green electrons and green molecules FORTESCUE CAPITAL Green energy investment accelerator platform FORTESCUE | 21
Slide 22: Fortescue Zero
Fortescue Zero DECARBONISATION Zero emission technology and product delivery POWER SYSTEMS High performance batteries and product portfolio HYDROGEN SYSTEMS PEM and Alkaline Electrolyser systems FORTESCUE | 22
Slide 23: Energy project pipeline
Energy project pipeline GREEN ENERGY Pipeline of projects in Australia, Brazil, Morocco, Norway and USA FINANCIAL DISCIPLINE Projects will progress when economic MARKET OUTLOOK Fortescue is steadfast in its commitment to Green Energy FORTESCUE | 23 Projects subject to Final Investment Decision; arti
Slide 24: Half Year Results
°. . or? HALF YEAR | | He FORTESCUE | 24
Slide 25: Earnings
Earnings Strong earnings through the cycle Revenue (US$m) Underlying EBITDA (US$m) Underlying NPAT1 (US$m) 9,512 9,036 5,912 3,337 8,708 5,611 3,154 7,835 7,638 4,796 4,352 2,368 2,346 3,641 1,553 H1 FY23 H2 FY23 H1FY24 H2 FY24 H1FY25 H1 FY23 H2 FY23 H1 FY24 H2 FY24 H1 FY25 H1 FY23 H2 FY23 H1 FY24 H
Slide 26: H1 FY24 NPAT to H1 FY25 NPAT Reconciliation
H1 FY24 NPAT 3,334 Iron ore, shipping revenue and other (1,901) operating revenue Cost of sales (198) Metals EBITDA Admin and research (52) Other income and (24) expenses Revenue, cost of sales, 6 other income and expenses Earnings reconciliation Energy EBITDA Admin and research (51) Admin, FX and F
Slide 27: Price realisations
Price realisations H1 FY25 hematite average revenue of US$85/dmt Hematite revenue realisation of the Platts 62% CFR Index (%) Platts 62% CFR Index (US$/dmt) 160 91 140 87 87 87 85 85 120 83 82 100 80 60 40 20 0 Jan-23 Apr-23 Jul-23 Oct-23 Jan-24 Apr-24 Jul-24 Oct-24 Dec-24 Q3 FY23 Q4 FY23 Q1 FY24 Q2
Slide 28: Prices and margins
Prices and margins Strong margins through the cycle 160 Prices and Metals Underlying EBITDA margin (US$/dmt) 140 120 100 99 80 60 65 63 60 40 47 20 - FY21 FY22 FY23 FY24 H1 FY25 Underlying EBITDA Platts 62% CFR Index Realised price 5-year Average Underlying EBITDA 5-year Average Realised Price FORTE
Slide 29: Cash generation
Cash generation Operational excellence and disciplined capital investment Net cash flow from operations (US$m) Capital expenditure (US$m)1 Free cash flow (US$m)2 2,735 2,655 4,484 1,791 1,792 2,453 4,170 3,749 1,523 1,375 1,372 2,948 1,582 2,430 661 H1 FY23 H2 FY23 H1 FY24 H2 FY24 H1 FY25 H1 FY23 H2
Slide 30: Capital expenditure
Capital expenditure Disciplined capital investments H1 FY25 Capital expenditure (US$m) 1 FY25 Capital expenditure guidance (US$m) Fleet 160 Deposits2 400 145 150 23 139 500 US$3.9bn - US$1.8bn1 US$4.2bn 2,400 – 147 1,310 300 – 2,600 400 Sustaining and Hub Development Decarbonisation Fortescue Energy
Slide 31: Strong balance sheet
Strong balance sheet Balanced debt maturity profile 6,077 Gross debt (US$m) Debt maturity profile excluding leases – principal (US$m) 5,400 5,439 5,321 5,318 1,025 1,500 959 800 700 600 275 H1 FY23 H2 FY23 H1 FY24 H2 FY24 H1 FY25 FY25 FY25 FY26 FY26 FY27 FY27 FY28 FY28 FY29 FY29 FY30 FY30 FY31 FY31
Slide 32: Robust credit metrics
Robust credit metrics Gross debt to EBITDA to not exceed 2x and gross gearing to not exceed 40 per cent through the cycle Gross debt to EBITDA (x) Gross gearing (%) 0.6 0.6 26 23 0.5 0.5 22 22 19 0.3 FY21 FY22 FY23 FY24 H1 FY25 FY21 FY22 FY23 FY24 H1 FY25 FORTESCUE | 32
Slide 33: Return on capital
Return on capital Profitable and capital efficient Return on equity (%) Return on capital employed1 (%) 66 66 35 30 36 27 31 27 20 22 FY21 FY22 FY23 FY24 H1 FY25 FY21 FY22 FY23 FY24 H1 FY25 1ROCE is calculated as earnings before interest and tax divided by average capital (total assets minus current
Slide 34: Delivering returns to shareholders
Delivering returns to shareholders Dividend policy to pay out 50-80% of Underlying NPAT Dividends (A$/share) and payout ratio (%) 5.00 0.90 78% 77% 80% 4.50 0.80 75% 70% 4.00 65% 62% 0.70 3.58 3.50 65% 52% 0.60 3.00 0.50 2.50 38% 36% 2.07 0.40 1.97 2.00 1.76 1.75 0.30 1.50 1.14 0.20 1.00 0.45 0.50 0
Slide 35: Disciplined capital allocation
Disciplined capital allocation Delivering Maintaining Investing in returns to balance sheet growth and shareholders strength development 50-80% payout BB+/Ba1 Value creation of Underlying NPAT, Committed to strong Across Energy dividend policy credit rating and Metals FORTESCUE | 35
Slide 36: We are Fortescue
Family We are Empowerment Fortescue Frugality Stretch Targets Integrity Enthusiasm Safety Courage and Determination Generating Ideas Humility FORTESCUE | 36