Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — Shareholder Meeting (November 2015)
54 slides from Fortescue's shareholder meeting presentation, Nov 11, 2015
Slide 1: Annual General Meeting
For personal use only Annual General Meeting 11 November 2015
Slide 2: Forward Looking Statements
Forward Looking Statements For personal use only Disclaimer Important Notice Additional Information The purpose of this presentation is to provide general information about This presentation should be read in conjunction with the Annual Financial Fortescue Metals Group Limited ("Fortescue"). It is n
Slide 3: CEO's Presentation
For personal use only CEO’s Presentation
Slide 4: Fortescue's world class assets
Fortescue’s world class assets For personal use only Pilbara Core supplier to Western Australia Asia’s growth
Slide 5: For personal use only
For personal use only
Slide 6: For personal use only
For personal use only
Slide 7: Key themes
Key themes For personal use only Product Sustainable Expansions performance complete Costs Mine life Established Cashflow Continuous product suite supports improvement balance sheet focus
Slide 8: Our Vision: The safest, lowest cost, most profitable iron ore producer
Our Vision: The safest, lowest cost, most profitable iron ore producer 4: Ww Fortescue Integrity Determination Set yourself Enthusiasm Empowerment Generating ideas Frugality
Slide 9: Safety is at the heart of Fortescue's values
Safety is at the heart of Fortescue’s values My brothers’ / sisters’ keeper For personal use only • Safety Priorities 1 Look after yourself 2 Look after your mates • Engagement active participation • Empowerment to make decisions • Encouragement to speak up • Leadership strong and visible
Slide 10: Delivery of sustainable cost improvements
Delivery of sustainable cost improvements For personal use only Through development of assets, efficiencies, productivity and costs saving 60 1 Solomon operations 50 48 44 2 Blending strategy 58% Fe 40 34 3 Processing, wet plants + de-sands 30 27 20 18 4 Operational efficiencies Exit FY16 at 10 $15
Slide 11: Moving down the global cost curve
Moving down the global cost curve For personal use only China's Iron Ore Supply CFR Costs (including royalties & ocean freight) 2012 2015 Domestic Chinese 150 Australia Brazil India South Africa Other 100 50 Other Aust Fortescue Fortescue Vale Rio Tinto BHP Vale Rio Tinto BHP 0 0 100 200 300 400 500
Slide 12: Debt maturity profile
Debt maturity profile For personal use only More than US$4.1bn of debt repaid to date 5,000 4,500 4,851 4,000 3,500 3,000 US$m 2,500 2,000 1,500 1,000 2,160 500 Extended Runway 889 917 0 CY2015 CY2016 0 CY2017 CY2018 CY2019 CY2020 CY2021 CY2022 Senior Secured Credit Facility Senior Unsecured Notes S
Slide 13: Accelerated debt reduction
Accelerated debt reduction For personal use only Repaying debt in advance of maturity • Purchase debt below par: On-market: gain US$68m and interest savings US$33m pa Tender offer: launched for US$750m of 2019 and 2022 Notes • On track for targeted 40% gearing ratio
Slide 14: Market
For personal use only Market
Slide 15: Iron ore supply in balance…sentiment driving price
Iron ore supply in balance…sentiment driving price For personal use only Port stocks stable, currently at 87mt 50 $220 IO Inventory days coverage (days) $200 62% Fe CFR (RHS) 40 $180 $160 Days Coverage 30 $140 $120 20 $100 10 $80 $60 0 $40 Jul-11 Jul-10 Jul-12 Jul-13 Jul-14 Jul-15 Apr-11 Apr-12 Apr-
Slide 16: China's long term growth remains strong
China’s long term growth remains strong For personal use only • Steel demand above 800mtpa • Competitive and rising steel exports - One Belt One Road • 300 million people to urbanise • Growth maintained 6-7%
Slide 17: Core supplier to Asia
Core supplier to Asia For personal use only Well established 18% market share of imported iron ore to China • Low impurity 58% Fe average • High value in use • Large diverse customer base • Reliable consistent delivery • Proximity to high growth region
Slide 18: Development and Resources
For personal use only Development and Resources
Slide 19: Exploration a core strength
Exploration a core strength For personal use only Consistent long term success • Proven world class team • 750mt+ new iron ore tonnes FY16 Western Hub 740mt Near mine exploration • Low cost exploration projects • Developing future growth options
Slide 20: Resource portfolio supports asset base
Resource portfolio supports asset base For personal use only Largest Pilbara tenement footprint 12,000 2,463 2,463 Mineral Resources dry in situ (Mt) 10,000 2,463 740 740 8,000 2,013 624 1,032 624 624 6,000 4,877 4,793 3,504 3,070 3,070 2,860 4,000 2,224 1,715 695 303 491 695 695 5,504 695 695 695 5
Slide 21: Supporting our local community
For personal use only Supporting our local community
Slide 22: Ending Aboriginal disparity in the Pilbara
Ending Aboriginal disparity in the Pilbara For personal use only Creating opportunities through training, employment and business opportunity
Slide 23: Focused strategy
For personal use only Focused strategy
Slide 24: The new force in iron ore
The new force in iron ore For personal use only Reliable efficient delivery Sustainable low cost World class producer assets + people 165mt Unique culture drives performance Production rate
Slide 25: Business of Meeting
For personal use only Business of Meeting
Slide 26: Financial Reports
Financial Reports For personal use only Consideration of the Financial Reports To receive and consider the financial report, the reports of the Directors and the auditors of the Company and its controlled entities for the year ended 30 June 2015. Further Information Mr Stephen Pearce, Fortescue’s CF
Slide 27: Resolution: Adoption of Remuneration Report
Resolution 1 For personal use only Adoption of Remuneration Report To consider and, if thought fit, to pass the following resolution as an advisory resolution: “That the Remuneration Report for the Company and its controlled entities for the year ended 30 June 2015 be approved and adopted.” Further
Slide 28: Resolution: Adoption of Remuneration Report
Resolution 1 For personal use only Adoption of Remuneration Report To consider and, if thought fit, to pass the following resolution as an advisory resolution: “That the Remuneration Report for the Company and its controlled entities for the year ended 30 June 2015 be approved and adopted.” Proxy Re
Slide 29: Resolution: Re-election of Mr Cao Huiquan
Resolution 2 For personal use only Re-election of Mr Cao Huiquan To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That Mr Cao Huiquan be re-elected as a Director of the Company.” Further Information • Mr Huiquan, who has an interest in the Resolution, mak
Slide 30: Resolution: Re-election of Mr Cao Huiquan
Resolution 2 For personal use only Re-election of Mr Cao Huiquan To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That Mr Cao Huiquan be re-elected as a Director of the Company.” Proxy Results FOR AGAINST OPEN TO CHAIR OPEN TO OTHER 2,319,346,446 97,443,7
Slide 31: Resolution: Election of Dr Jean Baderschneider
Resolution 3 For personal use only Election of Dr Jean Baderschneider To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That Dr Jean Baderschneider be elected as a Director of the Company.” Further Information • Dr Baderschneider, who has an interest in th
Slide 32: Resolution: Election of Dr Jean Baderschneider
Resolution 3 For personal use only Election of Dr Jean Baderschneider To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That Dr Jean Baderschneider be elected as a Director of the Company.” Proxy Results FOR AGAINST OPEN TO CHAIR OPEN TO OTHER 2,420,831,04
Slide 33: Resolution: Approval of Performance Rights Plan
Resolution 4 For personal use only Approval of the Fortescue Metals Group Ltd Performance Rights Plan To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That, for the purposes of Listing Rule 7.2 (Exception 9(b)) and for all other purposes, Shareholders app
Slide 34: Resolution: Approval of Performance Rights Plan
Resolution 4 For personal use only Approval of the Fortescue Metals Group Ltd Performance Rights Plan To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That, for the purposes of Listing Rule 7.2 (Exception 9(b)) and for all other purposes, Shareholders app
Slide 35: Resolution: Participation in Performance Rights Plan
Resolution 5 For personal use only Participation in the Performance Rights Plan by Mr Neville Power and Mr Peter Meurs To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That for the purposes of Listing Rule 10.14 and for all other purposes, Shareholders ap
Slide 36: Resolution: Participation in Performance Rights Plan
Resolution 5 For personal use only Participation in the Performance Rights Plan by Mr Neville Power and Mr Peter Meurs To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That for the purposes of Listing Rule 10.14 and for all other purposes, Shareholders ap
Slide 37: Chairman's Address
For personal use only Chairman’s Address
Slide 38: Fortescue: a world class operating company
Fortescue: a world class operating company For personal use only Founded First ore in 2003 in 2008 Simplicity and transparency Best address Shipped over for iron ore 580mt Unique culture
Slide 39: Consumer demand for beef is 'elastic'
Consumer demand for beef is ‘elastic’ For personal use only As the price of beef falls, demand increases 1.2 Price 1 Elastic demand curve Price 0.8 0.6 0.4 0.2 0 0 20 40 60 80 100 120 Quantity 140 Quantity
Slide 40: For iron ore, demand is 'inelastic'
For iron ore, demand is ‘inelastic’ For personal use only Lowering price of iron ore does not increase demand 1.2 Price 1 Price Inelastic demand curve 0.8 0.6 0.4 0.2 0 0 20 40 60 80 Quantity Minimal change in quantity100 120 140
Slide 41: Our Iron Ore
For personal use only Our Iron Ore
Slide 42: Market should dictate rational behaviour
Market should dictate rational behaviour For personal use only Our public education campaign has been successful “ Commodity prices are telling you that the market doesn’t need the volumes, so why keep adding new volumes to the market? If you can preserve your commodity price exposure, manage your p
Slide 43: Strengthening our relationships in China
Strengthening our relationships in China For personal use only Chinese market fundamentals are strong • Diamond Sponsor of the Boao Forum for 7 consecutive years • Continued success of the Australia China Senior Business Leaders Forum • Launch of ASA100
Slide 44: Minderoo Foundation
Minderoo Foundation For personal use only Fortescue success supporting key philanthropic ventures.
Slide 45: Minderoo Foundation: Catalytic Philanthropy
Minderoo Foundation For personal use only Catalytic Philanthropy
Slide 46: Minderoo Foundation
Minderoo Foundation For personal use only Give a hand up, not a hand out. • Over AU$222 million committed • 230 community organisations supported • 15 years of operation www.minderoo.com.au
Slide 47: Walk Free
Walk Free For personal use only End modern slavery in this generation. • 8.3 million people mobilised • Joint Declaration of Religious Leaders against Modern Slavery • 3rd edition of Global Slavery Index in 2016 • 2,940 people liberated from slavery www.walkfreefoundation.org
Slide 48: Generation One
Generation One For personal use only End Indigenous disparity through employment. • 24,000 jobs filled by Indigenous Australians • Creating Parity: Forrest Review – blueprint to end disadvantage • VTEC trial on target to fill 5,000 jobs by March 2016 www.generationone.org.au
Slide 49: Forrest Research Foundation
Forrest Research Foundation Attract the world’s best minds to Western Australia to tackle critical global issues. For personal use only • AU$65 million committed • Scholarships and residential hub • All five WA universities • Five scholarships awarded to date www.forrestfoundation.org.au
Slide 50: Thrive by Five
Thrive by Five For personal use only Every child should have the opportunity to reach their potential for tomorrow. • AU$20 million from Federal Government to improve service delivery in child care • AU$3 million research translation partnership with the Telethon Kids Institute • Challis model - 500
Slide 51: Arts and Culture
Arts and Culture For personal use only Encourage excellence, vibrancy, collaboration and new talent in the arts across Australia. • Over AU$20 million gifted to arts and culture organisations • AU$1 million committed to Western Australian Academy for Performing Arts (WAAPA) • Visiting international
Slide 52: Community
Community For personal use only Community development in Australia and internationally. • 230 community organisations supported through partnerships or grants • AU$12 million in shares gifted to community organisations. Dividends contribute to ongoing operations. • Education, anti-trafficking, mento
Slide 53: Fortescue's success is directly impacting lives
Fortescue’s success is directly impacting lives For personal use only
Slide 54: For personal use only
For personal use only www.fmgl.com.au @FortescueNews Proudly supporting:
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