Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Jefferies Institutional Investor Conference 2024
37 slides from Peabody Energy's conference presentation, Sep 4, 2024
Slide 1: Building Brighter Futures - Jefferies Institutional Investor Conference
B U I L D I N G B R I G H T E R F U T U R E S Jefferies Institutional Investor Conference September 4-5, 2024
Slide 2: Disclosure Regarding Forward-Looking Statements
2 Disclosure Regarding Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or var
Slide 3: Peabody – The Investment Thesis
3 Peabody – The Investment Thesis • Proven commitment to shareholder returns - Allocated nearly $600 million primarily through buybacks since restarting the shareholder return program Q2 2023 - Continuing commitment to return 65-100% of free cash flow • Unique diversified portfolio offers unmatched
Slide 4: Peabody Quick Facts
4 Peabody Quick Facts1 1 All statistics are for the year ended December 31, 2023. 2 Total Recordable Incident Frequency Rate (‘TRIFR’) equals recordable incidents per 200,000 hours worked; MSHA reported total U.S. TRIFR for 2023 of 2.72 3 Adjusted EBITDA is a non-GAAP financial measure. Refer to the
Slide 5: Portfolio Diversity and Financial Strength
5 Portfolio Diversity and Financial Strength • Global scale and diversification in most attractive regions • Segment Adjusted EBITDA of $506 million for the first half of 2024, on revenue of more than $2 billion(1) • Proven consistent operating results in the United States and Australia • Higher vol
Slide 6: Peabody's Financial Strategy to Maximize Shareholder Value
6 Peabody’s Financial Strategy to Maximize Shareholder Value No Secured Debt Reclamation Fully Funded Balance Sheet Resiliency Free Cash Flow Generation Capital Allocation Reinvest in the PortfolioShareholder Returns • Generated $1.8 billion of Free Cash Flow(1) for two years ended 2023 • Repaid all
Slide 7: Peabody Undervalued Relative to Peers
7 Peabody Undervalued Relative to Peers • Broad product and market diversification provides unparalleled optionality • Premium hard coking coal growth project in Australia which is expected to add ~4.7 million saleable tons to annual production ✓ Reweights segment adjusted EBITDA to > 50% metallurgi
Slide 8: Centurion Mine Complex: Growth Project
2 8 Centurion Mine Complex: Growth Project
Slide 9: Centurion: A World Class Asset & Organic Investment
9 Centurion: A World Class Asset & Organic Investment NPV $1.6B NPV/Share $12.80/share IRR ~25% Adj. EBITDA Margin ~45% Capex $489M FOB Cost ~$105/Short ton At 08/2024 excludes $375M of previous capex to 1st Longwall production LOM average ~125.9 million shares LOM average Total project return
Slide 10: Centurion Mine Complex: Organic Growth Project
10 Centurion Mine Complex: Organic Growth Project • An established cornerstone of tier one premium hard coking coal mine complex utilizing $1.0+ billion of existing infrastructure and equipment • Mine life of 25+ years with ~140 million ton integrated mine plan • Further weights Peabody’s long-term
Slide 11: Centurion: Project Summary
11 Centurion: Project Summary Description Integrated Mine Plan including Wards Well Deposit Reserves GM Seam: ~140 million tons Product Premium Low Vol Hard Coking Coal LOM Production ~4.7 million saleable tons average per year First Coal • Development – June 2024 • Shipment – Expected December 2024
Slide 12: Seaborne Metallurgical Coal Cash Cost Curve
12 Seaborne Metallurgical Coal Cash Cost Curve Centurion strengthens Peabody’s position in the Australian seaborne met coal market 1 Cash cost based on Wood Mackenzie nominal 2024 values for Australian metallurgical coal operations at US$210 per tonne/FOB and 0.72 USD/AUD FX rate (excluding safeguar
Slide 13: Centurion Will Price Favorably Amongst the Highest-grade Coals
13 Centurion Will Price Favorably Amongst the Highest- grade Coals in the Market Centurion Quality is Perfect Balance of High Coal Reactivity and Coke Strength Very high coke strength - +68 CSR means highly productive coke Very low ash for premium coking coal - Less than 10% ash, increasingly rare L
Slide 14: Key Takeaways
14 KEY TAKEAWAYS Peabody’s organic investment plan to maximize shareholder value with Centurion growth project Provides Peabody’s shareholders exposure to increasing demand for hard coking coal Premier large-scale hard coking coal asset with Australia geographical proximity to Asian demand ~$1.6B NP
Slide 15: Market Overview
Market Overview BUILDING BRIGHTER FUTURES
Slide 16: Supply Side Response Limited Due to High Barriers to Entry
16 Supply Side Response Limited Due to High Barriers to Entry Coal Supply Development Constraints Reduced Capital Investment NGO Activity Political Environment Increased Permit Scrutiny Labor Shortage Increased Regulation
Slide 17: Seaborne Met Coal Demand Growing
17 Seaborne Met Coal Demand Growing • China’s rapid urbanization drove met coal consumption growth the last 15 years; India is projected to drive the next ~25 years and was the growth story of 2023 • Australia projected to continue to dominate seaborne met coal supply, advantaged by high-quality pro
Slide 18: Seaborne Thermal Coal Demand – New Supply Required
18 Seaborne Thermal Coal Demand – New Supply Required • Demand is projected to exceed installed and probable supply through the 2030s • Operating resources are in decline and could fall well short of forecast demand • China’s growth in ’23 suggests potential for China’s seaborne demand to exceed for
Slide 19: U.S. Thermal – Consistent Free Cash Flow in the Segment
19 U.S. Thermal – Consistent Free Cash Flow in the Segment Our U.S. Thermal platform continues to demonstrate strong positive margins and free cash flows • The U.S. thermal operations shipped 19.5 million tons and realized an Adjusted EBITDA margin of $2.73 per ton in the second quarter 2024, after
Slide 20: U.S. Policy/EPA Regulations
20 U.S. Policy/EPA Regulations (1) “America’s Power Stresses Importance of Dispatchable Resources” - America's Power (americaspower.org) Proposed EPA Regulations: • In April, the EPA released its Clean Power Plan 2.0 which will accelerate the retirement of well-functioning coal plants necessary for
Slide 21: Sustainability
Sustainability BUILDING BRIGHTER FUTURES
Slide 22: ESG to Create Long-Term Stakeholder Value
22 ESG to Create Long-Term Stakeholder Value • Funded 100% of final global reclamation obligations - $720 million • Targets for greenhouse gas reduction, land reclamation and environmental compliance • Collaborating with stakeholders on a pipeline of projects aimed at reducing emissions and creating
Slide 23: Commitment to Sustainability and ESG
23 Commitment to Sustainability and ESG • We strive to be the coal producer of choice • We align our sustainability strategy to the expectations of our customers and stakeholders • We are positioned to create further value by reducing emissions at our operations • We will set further incremental, me
Slide 24: Development Opportunity to Create Additional Value with Existing Assets
24 Peabody Development Opportunity to Create Additional Value with Our Existing Assets • Met Coal Resources: 715 million tons of measured and indicated resources at 12/31/2023 - Opportunity: redevelopment of Centurion Mine, metallurgical coal deposit • Methane Gas: 60,000+ tons per year - Opportunit
Slide 25: Appendix Materials
Appendix Materials BUILDING BRIGHTER FUTURES
Slide 26: 2024 Guidance Table
26 2024 Guidance Table Segment Performance 2024 Full Year Total Volume (millions of short tons) Priced Volume (millions of short tons) Priced Volume Pricing per Short Ton Average Cost per Short Ton Seaborne Thermal 15.7 - 16.2 12 $65.09 $45.00 - $50.00 Seaborne Thermal (Export) 9.8 - 10.3 6.2 $101.9
Slide 27: Seaborne Met Segment Operations Overview
27 Seaborne Met Segment Operations Overview Note: Production is for full year 2023. Reserves reflect estimated proven and probable reserves as of December 31, 2023. Strategic Advantage: Multiple locations and products, positioned to serve Asia Pacific and Atlantic market Metropolitan Mine Production
Slide 28: Seaborne Thermal Segment Operations Overview
28 Seaborne Thermal Segment Operations Overview Strategic Advantage: High margin operations positioned to serve Asia Pacific market Wilpinjong Mine Production: 12.0 million tons (export and domestic) Reserves: 57 million tons Type: Surface - Dozer/Cast, Truck/Shovel Product: Export (5,000-6,000 kcal
Slide 29: PRB Segment Operations Overview
29 PRB Segment Operations Overview Strategic Advantage: Low-cost operations, largest producer, significant reserves, shared resources, technologies North Antelope Rochelle Mine (NARM) Production: 62.0 million tons Reserves: 1,364 million tons Type: Surface - Dragline, Dozer/Cast, Truck/Shovel Produc
Slide 30: Other U.S. Thermal Segment Operations Overview
30 Other U.S. Thermal Segment Operations Overview Strategic Advantage: Located to serve regional customers in high coal utilization regions Bear Run Mine Production: 5.5 million tons Reserves: 72 million tons Type: Surface - Dragline, Dozer/Cast, Truck/Shovel Product: Thermal ~11,000 Btu/lb, 4.5 lbs
Slide 31: Other U.S. Thermal Segment Operations Overview (continued)
31 Other U.S. Thermal Segment Operations Overview (continued) Note: Production is for full year 2023. Reserves reflect estimated proven and probable reserves as of December 31, 2023. with competitive cost operations and ample reserves / resources Gateway North Mine Production: 2.5 million tons Reser
Slide 32: Long-Term Bonding Obligations
32 Long-Term Bonding Obligations • Approximately $1.5 billion in financial performance obligations, primarily relating to reclamation obligations in the U.S and Australia • $1.2 billion relates directly to reclamation with the remaining ~$0.3 billion related to other obligations such as retiree heal
Slide 33: Reconciliation of Non-GAAP Measures
33 Reconciliation of Non-GAAP Measures Note: Refer to definitions and footnotes on slides 37. Year Ended Year Ended Year Ended Quarter Ended Quarter Ended Six Months Ended Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 Mar. 31, 2024 Jun. 30, 2024 Jun. 30, 2024 Tons Sold (In Millions) Seaborne Thermal 15.
Slide 34: Reconciliation of Non-GAAP Measures
34 Reconciliation of Non-GAAP Measures Note: Refer to definitions and footnotes on slide 37. Year Ended Year Ended Year Ended Quarter Ended Quarter Ended Six Months Ended Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 Mar. 31, 2024 Jun. 30, 2024 Jun. 30, 2024 Reconciliation of Non-GAAP Financial Measures
Slide 35: Reconciliation of Non-GAAP Measures
35 Reconciliation of Non-GAAP Measures Note: Refer to definitions and footnotes on slide 37. Year Ended Year Ended Year Ended Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 Segment Free Cash Flow (In Millions) (6) Seaborne Thermal Adjusted EBITDA 353.1$ 647.6$ 576.8$ Less: Segment additions to property,
Slide 36: Reconciliation of Non-GAAP Measures
36 Reconciliation of Non-GAAP Measures Note: Refer to definitions and footnotes on slide 37. Year Ended Year Ended Year Ended Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 Adjusted Capital Expenditures (In Mill ions) (7) Seaborne Thermal Segment additions to property, plant, equipment and mine developme
Slide 37: Reconciliation of Non-GAAP Measures
37 Reconciliation of Non-GAAP Measures
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