Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Investor Presentation (October 2024)
32 slides from Peabody Energy's investor presentation, Oct 14, 2024
Slide 1: Centurion: Peabody's Cornerstone Metallurgical Coal Asset
BUILDING BRIGHTER FUTURES Centurion Peabody’s Cornerstone Metallurgical Coal Asset October 14, 2024
Slide 2: Disclosure Regarding Forward-Looking Statements
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 varia
Slide 3: Peabody – The Investment Thesis
Peabody – The Investment Thesis Peabody is committed to increasing shareholder value through a balanced approach of maximizing shareholder returns and investing in the development of the Centurion metallurgical coal project • Proven commitment to shareholder returns - Allocated nearly $600 million p
Slide 4: Centurion - Peabody's Cornerstone Metallurgical Coal Asset
Centurion - Peabody’s Cornerstone Metallurgical Coal Asset • Tier one premium hard coking coal mine NPV NPV/Share complex utilizing $1.0+ billion of existing infrastructure and equipment $1.6B $12.80/share • Mine life of 25+ years with ~140 million tons At 08/2024 excludes $375M of previous capex ~1
Slide 5: Steelmaking Coal – Market Overview
Steelmaking Coal – Market Overview 2 5
Slide 6: The World Requires Steel and Centurion Steelmaking Coal
The World Requires Steel and Centurion Steelmaking Coal • Metallurgical coal is an essential ingredient in the production of steel, making it one of the most widely used industrial materials on Earth • It takes around 770 kilograms of coal to make one ton of steel, with approximately 70 percent of g
Slide 7: Blast Furnace Steel Production Shifting to India & Southeast Asia
Blast Furnace Steel Production Shifting to India & Southeast Asia, Fueling Seaborne Metallurgical Coal Demand Proportionate Location of BOF Steel Production Seaborne Metallurgical Coal Demand (% of Global Production) (Million Tonnes) 5% 5% 5% 6% 360 344 5% 5% 5% 6% 328 25 6% 7% 7% 5% 316 35 14 48 15
Slide 8: New Supply of HCC Required to Meet Demand
New Supply of HCC Required to Meet Demand Seaborne Demand By Grade New Supply of HCC Required (Million Tonnes) (Million Tonnes) 360 110 328 344 316 49 100 56 38 46 90 76 80 70 70 74 70 60 50 40 235 208 212 214 30 20 10 0 2024 2030 2040 2050 2035 2040 2045 2050 Hard Coking Coal (HCC) New Supply of HC
Slide 9: Queensland Coal Shipments, Advantaged by Proximity to Demand Growth – India
Queensland Coal Shipments, Advantaged by Proximity to the Center of Demand Growth – India Additional Ocean Freight Cost vs. Queensland East Coast - USA to India $40 (USD/Mt) $30 Avg. $21 $20 $10 $0 2019 2020 2021 2022 2023 2024 West Coast - Canada to India $12 $10 (USD/Mt) $8 Avg. $8 $6 $4 $2 $0 201
Slide 10: Australian PLV – The Cornerstone of Customer Blends
Australian PLV – The Cornerstone of Customer Blends and Widely considered the Highest-grade Coal in the Market • The framework diagram on the right demonstrates Coal Blending for Coke Optimization Framework why Centurion will be the cornerstone of customer 80% Premium HCC blends 70% Premium LV • Cen
Slide 11: Centurion Expected to Price Favorably Amongst the Highest-grade Coals
Centurion Expected to 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
Slide 12: Centurion - Tier One Asset Within World's Premier HCC Corridor
Centurion - Tier One Asset Within World’s Premier HCC Corridor • The majority of the world’s Premium HCC comes from Australia’s Bowen Basin, specifically the Moranbah Coal Measures • Moranbah Coal Measures are the widely assumed “Benchmark” of HCC qualities • Ownership of mines in this premium corri
Slide 13: Project Overview
Project Overview Peabody BUILDING BRIGHTER FUTURES
Slide 14: Major Project Stages & Milestones
Major Project Stages & Milestones Major Project Stages & Milestones Completed/Estimated First Development Coal June 2024 Second Continuous Miner & July 2024 ~140 Employees CHPP Refurbishment September 2024 First Coal Shipment Q4 2024 Third Continuous Miner Q4 2024 ~300 Employees 2025 ~400 Employees
Slide 15: Centurion Project Summary – Development KPI's
Centurion Project Summary – Development KPI’s Centurion South Project Map Centurion North 2025: 5.1 Development 2024: 4.1 Development Meters to LW Centurion Meters to LW 2026: 7.2 2025: 18.1 North Coal Production Coal Production 2027: 11.1 (Km) 2026: 3.5 (Km) 2028: 18.9 Reserves 20 million tons Rese
Slide 16: Centurion Mine Complex - World-Class Infrastructure in Place
Centurion Mine Complex - World-Class Infrastructure in Place Brownfield redevelopment benefits from utilizing $1.0+ billion of existing infrastructure and equipment Coal Handling Prep Plant (CHPP) with successful history New CAT longwall system on the surface Dedicated accommodation village for over
Slide 17: Mining Equipment
Mining Equipment Type Manufacturer/Model Description # of Units Komatsu 12CM30 Continuous Miner 3 Komatsu BF-14 Feeder Breaker 2 Komatsu 10SC32 Shuttle Car 4 Sandvik LS190 Loader 5 Development Torque Titan Loader 5 AME Mine Cruisers Personnel Transporter 10 MK8 AMP Control Power Center 2 Howdens 24m
Slide 18: Heartland – The Goonyella Rail System and Port of Hay Point
Established Logistics Arrangements in the Coking Coal Heartland – The Goonyella Rail System and Port of Hay Point • All surface logistics infrastructure in place • The port and rail are also used by our existing operations Coppabella, Moorvale, and Middlemount • Trains will travel 217km to the Port
Slide 19: Safety – A Core Value
Safety – A Core Value • We have taken the lessons from past incidents and incorporated them into our management plans for longwall operations • At Centurion, the approach will be multifaceted with advanced gas drainage and active inertization • Peabody has spent considerable time, effort and funds t
Slide 20: Project Economics
Project Economics Peabody BUILDING BRIGHTER FUTURES
Slide 21: Centurion - Our Cornerstone Metallurgical Coal Asset
Centurion - Our Cornerstone Metallurgical Coal Asset NPV NPV/Share IRR $1.6B $12.80/share ~25% At 08/2024 excludes $375M of previous capex ~125.9 million shares Total project return Adj. EBITDA (1) Capex FOB Cost Margin $489M ~$105/Short ton ~45% LOM average to 1st Longwall production LOM average (1
Slide 22: Centurion Project Summary – Financial KPI's
Centurion Project Summary – Financial KPI’s Saleable Production Description Centurion South & North (Million Tons) Reserves GM Seam: ~140 million tons 4.7 4.8 Product Premium Low Vol Hard Coking Coal (PLV HCC) 3.5 3.3 LOM ~4.7 million saleable tons average per year Production Costs ~$105/ton (includ
Slide 23: Capital Expenditures
Capital Expenditures Total Project Development Capex Centurion South (US$ Millions) • $489M to 1st Longwall in 2026 • ~$250M Spent to Date (through 9/30/2024) $243 $216 Centurion North $146 • $430M to 1st Longwall in 2029 $123 • ~$20M Spent to Date (through 9/30/2024) $99 $92 2023 2024 2025 2026 202
Slide 24: Centurion Transforms Peabody's Seaborne Metallurgical Coal Segment
Centurion Transforms Peabody’s Seaborne Metallurgical Coal Segment Metallurgical Coal Sales Metallurgical Sales By Grade (Million Tons) 2023 10% 24% 60% +68% 11.6 6% PCI Premium LV HCC High Vol A AUS Low Vol HCC Other 6.9 2026E 7% 13% 30% 16% 34% (1) 2023 2023 Pro Forma LOM Average PCI Premium LV HC
Slide 25: Consistent Free Cash Flow Generator
Consistent Free Cash Flow Generator Centurion increases Peabody’s metallurgical coal optionality Illustrative Impact to Seaborne Met Adj. EBITDA (1) Illustrative Centurion Adj. EBITDA(1) Across Various PLV HCC Prices (US$ In Millions) Margin Per Tonne Adj. EBITDA (US$ in Millions) $950 89% $512 117%
Slide 26: Centurion - Organic Growth with a Cornerstone Asset: Key Takeaways
Centurion - Organic Growth with a Cornerstone Asset KEY TAKEAWAYS Peabody’s organic investment plan is 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 Austra
Slide 27: Building Brighter Futures
BUILDING BRIGHTER FUTURES 27
Slide 28: Appendix
Appendix Peabody BUILDING BRIGHTER FUTURES 28
Slide 29: Centurion Royalties
Centurion Royalties Queensland Government Royalty Rates • Centurion is subject to the Queensland Government Royalty charged on total revenue. Queensland Government royalties are Average price per tonne for period Rate based on coal prices per tonne (in $A). Up to and including $100 7% • Centurion So
Slide 30: Australian Safeguard Mechanism
Australian Safeguard Mechanism • Centurion Mine is subject to the Australian Safeguard Mechanism, which requires • Determination and assurance of a site-specific emission intensity • Annual reductions in emissions, aligned with Australian greenhouse gas emission reduction targets • Retirement of off
Slide 31: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Year Ended Year Ended Dec. 31, 2022 Dec. 31, 2023 Adjusted EBITDA (In Millions) (1) Seaborne Thermal $ 647.6 $ 576.8 Seaborne Metallurgical 781.7 438.1 Powder River Basin 68.2 153.7 Other U.S. Thermal 242.4 207.5 Total U.S. Thermal 310.6 361.2 Middlemount 132.8 13
Slide 32: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Note: Management believes that non-GAAP performance measures are used by investors to measure our operating performance. These measures are not intended to serve as alternatives to U.S. GAAP measures of performance and may not be comparable to similarly-titled mea
Peabody Energy — Investor Presentation (October 2024) on 6ix