Slide 1: 2020 Full Year Results Presentation
1 Iluka Resources Limited 2020 Full Year Results Presentation Tom O’Leary, Managing Director Narngulu, Western Australia
Slide 2: Disclaimer and Compliance Statement
Disclaimer and Compliance Statement 2 This presentation has been prepared by Iluka Resources Limited (Iluka). By accessing this presentation you acknowledge that you have read and understood the following statement. This document provides an indicative outlook for the Iluka business in the 2021 fina
Slide 3: Delivering Sustainable Value
Delivering Sustainable Value 3 Disciplined Performance in 2020 Well Placed for 2021 Promising Future • Prioritised safety of people and communities • Net cash position and significant funding headroom • Emerging position in rare earths • Operational settings flexed to market conditions • Positive in
Slide 4: 2020 Financial Result
2020 Financial Result 4 Underlying group EBITDA $423 million despite challenging global macroeconomic environment (2019: $616 million) NPAT $2.4 billion including earnings from the demerger of Deterra Royalties (2019: $300 million loss) Result underpinned by disciplined performance Underlying NPAT o
Slide 5: Iluka's Commitment to Sustainability
Iluka’s Commitment to Sustainability 5 Key Pillars of Iluka’s Sustainability Approach • Health and Safety 2.8 TRIFR TCFD alignment (2019: 2.9) Year 2 of 3 • Our People • Our Communities • Environmental Stewardship 28% 576 • Governance and Integrity Indigenous Employment at hectares Jacinth-Ambrosia
Slide 6: Financial Results
Financial Results Capel, Western Australia
Slide 7: Key metrics
Key metrics 7 $2,410m Units 2020 2019 % change Reported NPAT Z/R/SR production kt 585.2 702.4 (16.7) Z/R/SR sales kt 517.5 680.8 (24.0) ($300m loss 2019) Mineral sands revenue $m 947.0 1,193.1 (20.6) Mineral sands EBITDA $m 342.0 530.9 (35.6) Underlying Group EBITDA1 $m 423.1 616.0 (31.3) $151m Prof
Slide 8: Underlying NPAT – 2020 versus 2019
Underlying NPAT – 2020 versus 2019 8 $m Main features 300 • Reduced sales volumes due to the impact of COVID-19 on markets and synthetic rutile contractual dispute • Higher unit cost of goods sold reflecting: 250 ‒ lower ore grade at Jacinth-Ambrosia ( 31 ) ‒ transition to higher cost Cataby ilmenit
Slide 9: Net Cash 31 December 2019 to 31 December 2020
Net Cash 31 December 2019 to 31 December 2020 9 $m FY 2020 free cash inflow of $36 million Main features: 350 92 • Operational setting changes to reduce cash costs and preserve operating cash flow 300 (10) (3) • $71 million capital expenditure to progress key projects, including Eneabba, Sembehun st
Slide 10: Balance Sheet
Balance Sheet 10 Iluka maintained a strong balance sheet during 2020, preserving a net cash position while investing in key projects, in line with stated target of zero net debt over the cycle $50m net cash Net Debt, Gearing and Total Facilities $m Gearing % at 31 December 2020 1000 40 ($43m net cas
Slide 11: Mining Area C Royalty and Demerger of Deterra Royalties
Mining Area C Royalty and Demerger of Deterra Royalties 11 Iluka successfully completed the demerger of its royalty business, creating Deterra Royalties in November 2020 and retains a 20% stake in Deterra Royalties as a source of financial strength $81m • Pre demerger: Iluka received royalty payment
Slide 12: Mineral Sands Markets
Mineral Sands Markets Port of Geraldton, Western Australia
Slide 13: Zircon Market Key Features
Zircon Market 13 Key Features FY20 Z/R/SR Sales Revenue 2020 sales 2020 price Zircon 49% 240kt US$1,319/t 2019: 274kt 2019: US$1,487/t (zircon premium and standard) Result Overview Zircon (premium and standard) net realised • Demand levels remain down on previous years but conditions FOB price US$/t
Slide 14: Zircon Market Key Features
Zircon Market 14 Key Features Sales by Region Sales by Industry • Chinese ceramics market affected by lockdowns in H1, • Sales to ceramics market recovered strongly in H2 returning to ~60% capacity for remainder of year • Fused zirconia customer purchases were second-half weighed after • Europe, Mid
Slide 15: High Grade Titanium Feedstock Market Key Features
High Grade Titanium Feedstock Market 15 Key Features FY20 Z/R/SR Sales Revenue 2020 sales 2020 price Synthetic rutile 21% 278kt US$1,220/t 2019: 407kt 2019: US$1,142/t Rutile (excluding HYTI) Rutile 30% Result Overview Rutile net realised FOB price US$/t • Pigment and paint market affected by initia
Slide 16: High Grade Titanium Feedstock Market Key Features
High Grade Titanium Feedstock Market 16 Key Features Sales by Region Sales by Industry • US pigment industry demand recovery lead by increased DIY • The pigment industry improved during H2 paint market • Iluka’s pigment sales were down due to the contractual dispute • European market improved in H2
Slide 17: Magnet Rare Earths Market Outlook
Magnet Rare Earths Market Outlook 17 End Market Applications Global End Market Growth NdPr Market Balance Forecast Passenger EV Sales (m) 40 Government policies supporting switch to EV’s . Forecast NdPr Oxide market balance (kt) EVs currently ~6% of passenger vehicle sales, forecast 10 Passenger, co
Slide 18: Mineral Sands Operations
Mineral Sands Operations Cataby, Western Australia
Slide 19: Operational Flexibility
Operational Flexibility 19 Iluka has a portfolio of operations weighted towards premium zircon and high-grade titanium products. Operational configuration is geared to: optimise production in response to market conditions; minimise costs and improve cash flow; and maintain flexibility in line with m
Slide 20: Mineral Sands Operations – Inventory Position
Mineral Sands Operations – Inventory Position 20 Increased inventory due to subdued market conditions and synthetic rutile contractual dispute • Increase in total inventory to $616 million (December 2019: $425 million) • Increase in synthetic rutile finished goods stocks of 112kt • Stocks of other f
Slide 21: Eneabba Operations Production and Financial Parameters
Eneabba Operations Production and Financial Parameters 21 Phase 11 Phase 21 Capex <$10 million ~$35 million Average annual production cash costs ~$4 million $35-40 million Payback period ~6 months <1 year 16-20ktpa 90% monazite concentrate Average annual production ~50ktpa 20% monazite-zircon concen
Slide 22: Projects
Projects Eneabba, Western Australia
Slide 23: Project Pipeline Summary
Project Pipeline Summary 23 The company develops and progressively gates projects towards execution subject to: (i) improving confidence and satisfaction with the risk-return attributes, (ii) continued strategic alignment, and (iii) sequencing to take advantage of economic and market outlook. ASSESS
Slide 24: Eneabba, Western Australia
Eneabba, Western Australia 24 Eneabba Phase 1 delivered and operating. Phase 2 in execute and due for completion H1 2022. Iluka also actively exploring the potential for the downstream processing of rare earths in Australia. Project Overview The Eneabba project in Western Australia involves the extr
Slide 25: Balranald, New South Wales
Balranald, New South Wales 25 Third technology trial completed and confirmed effectiveness of the underground mining method. Work has commenced to scope the Definitive Feasibility Study (DFS). Project Overview Balranald and Nepean are two rutile-rich deposits in the northern Murray Basin, New South
Slide 26: Wimmera, Victoria
Wimmera, Victoria 26 Wimmera is a large-scale deposit with the potential to produce ceramic-grade zircon and rare earth products. Project work is focussed on finding a processing solution to remove impurities from the zircon in the deposit. Project Overview The Wimmera project involves the mining an
Slide 27: Sembehun, Sierra Leone
Sembehun, Sierra Leone 27 Travel restrictions limited site access but planning for the hydraulic mining continued and is now planned for H1 2021. Project Overview The Sembehun group of deposits are situated 20 to 30 kilometres north-west of the existing Sierra Rutile operations. Sembehun is one of t
Slide 28: Summary and Outlook
Summary and Outlook Sierra Leone
Slide 29: 2021 Outlook
2021 Outlook 29 Iluka enters 2021 with a strong balance sheet and pipeline of projects to deliver future value. The company will continue to optimise operational settings in line with market conditions, focus on preserving cashflow and exercise capital discipline. 2021 Outlook: • Building on momentu
Slide 30: Outlook for 2021 – Group
Outlook for 2021 – Group 30 Key Parameters 2019 2020 20211 Comments Annual production Zircon kt 322 185 285 Production includes 60kt of zircon in concentrate. Rutile production assumes improved performance Rutile2 kt 184 173 200 from SRL and higher production from Narngulu Synthetic Rutile kt 196 22
Slide 31: Outlook for 2021 – Group
Outlook for 2021 – Group 31 Key Parameters 2019 2020 2021 Comments Cash costs ($m) Range of cash costs relate to costs for a three month vs six month idling of the SR2 kiln, and includes lower site Cash costs of production (Z/R/SR) 529 537 500 -520 costs and lower HMC transport costs between Cataby
Slide 32: Outlook for 2021 – Sierra Rutile
Outlook for 2021 – Sierra Rutile 32 Key Parameters 2019 2020 2021 Comments Annual production Rutile kt 137 120 145 Requires higher level of consistency in operational performance Zircon kt 9 7 7 Total Z/R kt 146 127 152 Ilmenite kt 59 46 54 Annual unit costs & capital expenditure Cash costs of produ
Slide 33: Supplementary Information
Supplementary Information Jacinth-Ambrosia, South Australia
Slide 34: Supplementary Information – Production, Sales, Costs, Revenue
Supplementary Information – Production, Sales, Costs, Revenue 34 2020 2019 % change Production Zircon kt 185.2 322.1 (42.5) Rutile kt 172.6 184.1 (6.2) Synthetic rutile kt 227.4 196.2 15.9 Total Z/R/SR production kt 585.2 702.4 (16.7) Ilmenite – saleable and upgradeable kt 455.9 318.6 43.1 Total pro
Slide 35: Supplementary Information – Summary Group Results
Supplementary Information – Summary Group Results 35 $ million 2020 2019 % change Mineral sands revenue 947.0 1,193.1 (20.6) Mineral sands EBITDA 342.0 530.9 (35.6) Mineral sands EBITDA margin % 36.1% 44.5% (18.9) Mining Area C royalty EBITDA / Share of profit from associate 81.1 85.1 (4.8) Underlyi
Slide 36: Supplementary Information – Income Statement
Supplementary Information – Income Statement 36 A$ million 2020 2019 % change Z/R/SR revenue 841.0 1,128.7 (25.5) Ilmenite and other revenue 106.0 64.4 64.6 Mineral Sands Revenue 947.0 1,193.1 (20.6) Cash costs of production (558.7) (539.6) (3.5) Inventory movement - cash 142.3 63.4 124.4 Restructur
Slide 37: Supplementary Information – Reconciliation of non-IFRS information
Supplementary Information – Reconciliation of non-IFRS information 37 Reconciliation of non-IFRS financial information to profit before tax Expl & Mineral JA/MW C/SW US/MB SRL Oth Corp Sands MAC Group Mineral sands revenue 389.0 300.4 34.5 223.1 (0.0) - 947.0 - 947.0 AASB 15 freight revenue 20.6 8.5
Slide 38: Supplementary Information - Prices
Supplementary Information - Prices 38 Full year H1 Q3 Q4 H2 Full year Weighted Average Price US$/tonne FOB 2019 2020 2020 2020 2020 2020 Zircon Premium and Standard 1,487 1,354 1,311 1,291 1,301 1,319 Zircon 1,380 1,265 1,271 1,144 1,194 1,217 (all products including zircon in concentrate)1 Rutile 1
Slide 39: For more information contact
For more information contact: Luke Woodgate Group Manager, Investor Relations and Corporate Affairs investor.relations@iluka.com +61 (0) 477 749 942 Narngulu, Western Australia