Mineral Resources Limited · ASX:MIN

Mineral Resources — Investor Presentation (August 2021)

44 slides from Mineral Resources's investor presentation, Aug 11, 2021

  1. Slide 1: FY21 Full Year Results

    FY21 FULL YEAR RESULTS 11 August 2021 ASX:MIN

  2. Slide 2: Contents

    CONTENTS HIGHLIGHTS 03 SUSTAINABILITY PERFORMANCE 04 FINANCIAL PERFORMANCE 07 OPERATIONAL PERFORMANCE 18 FUTURE DIRECTION 23 APPENDIX 30 2

  3. Slide 3: FY21 Highlights

    FY21 HIGHLIGHTS Mining Services • Remained COVID free • Production volume up 20% pcp • TRIFR 2.31, 30% improvement • Mining Services EBITDA up 29% pcp • Revenue $3.7bn, up 76% pcp Commodities • Underlying EBITDA $1.9bn, up 148% pcp • Acquired and developed Wonmunna Mine • Cash $1.5bn • Record iron o

  4. Slide 4: FY21 Sustainability Performance

    FY21 SUSTAINABILITY PERFORMANCE 2.31 Injury Frequency Rates (Injuries per Million Hours Worked) TRIFR1 10.00 1.00 30% Improvement TRIFR LTIFR Total Recordable Injury Frequency Rate (TRIFR) Lost Time Injury Frequency Rate (LTIFR) 8.00 0.80 7.15 0.12 LTIFR 5.99 6.00 0.60 1 4.86 3.99 4.00 0.40 3.29 2.3

  5. Slide 5: MRL A New Brand Of Mental Health

    MRL A NEW BRAND OF MENTAL HEALTH MENTAL HEALTH IS AS IMPORTANT AS PHYSICAL HEALTH AND SAFETY • 700 staff have participated in Mental Health Literacy modules – Greater likelihood of accessing support earlier • 50 staff accredited across mental health first aid and counselling – through our partnershi

  6. Slide 6: FY21 Sustainability Performance

    FY21 SUSTAINABILITY PERFORMANCE MRL IS COMMITTED TO NET ZERO EMISSIONS BY 2050 Apprentices, 130 350 3.5 Trainees, Emissions Intensity (Tonnes CO2 per TMM) 3.2 Graduates 300 3.0 250 2.4 2.5 2.3 200 2.0 CO2 Equivalent (kt) 150 1.5 $693m Taxes and 100 1.0 50 0.5 Royalties paid 0 0.0 FY19 FY20 FY21 Dies

  7. Slide 7: Financial Performance

    FINANCIAL PERFORMANCE 7

  8. Slide 8: FY21 Financial Performance Summary

    FY21 FINANCIAL PERFORMANCE SUMMARY $3.7bn 38.6% Revenue ROIC 76% on FY20 After Tax $2.75 $1.6bn $1.9bn Dividends per share 175% on FY20 Operating Underlying EBITDA Cash Flow1 ↑148% on FY20 ↑ 144% on FY20 $1.5bn $745m Cash Capex 1. Operating cash flow excludes tax paid of $79m and $333m in FY20 and F

  9. Slide 9: FY21 Underlying Profit & Loss

    FY21 UNDERLYING PROFIT & LOSS • Revenue of $3.7bn up 76% on prior corresponding period (pcp) and Underlying Profit & Loss FY20 FY21 Variance ($ million) EBITDA of $1.9bn up 148% on pcp Revenue 2,125 3,734 1,609 • FY21 Revenue and EBITDA driven by: Operating costs (1,359) (1,833) (473) • Mining Servi

  10. Slide 10: FY20 To FY21 Underlying EBITDA

    FY20 TO FY21 UNDERLYING EBITDA Controllable External 18% Growth in Controllable EBITDA 1. FY21 Underlying EBITDA excluding the impact of commodity prices, shipping and royalties 10

  11. Slide 11: FY21 Cash Flow

    FY21 CASH FLOW Cash Flow ($ million) FY20 FY21 Variance Underlying EBITDA 765 1,901 1,135 • Net cash flow from operating activities before financing and Movement in working capital 29 70 40 tax is greater than Underlying EBITDA Net cash flow from operating activities before 794 1,970 1,176 financing

  12. Slide 12: FY21 Capital Expenditure

    FY21 CAPITAL EXPENDITURE • FY21 Capex of $745m includes significant investment in Capex ($ million) FY21 Actuals growth projects: Commodities 206 • Development of Wonmunna iron ore mine as part of Utah Point Hub Mining Services 156 • Increased production at Yilgarn Hub Central & Corp Office & Other

  13. Slide 13: FY21 Summary Balance Sheet

    FY21 SUMMARY BALANCE SHEET • Closing cash of $1.5bn Summary Balance Sheet ($ million) FY20 FY21 Variance Inventories 156 123 (33) • Increased scale of operations has caused growth in receivables Trade and other receivables 178 331 153 and payables Trade and other payables (319) (582) (263) • Invento

  14. Slide 14: FY20 To FY21 Net Debt Waterfall

    FY20 TO FY21 NET DEBT WATERFALL 1. Final tax payment on sale of 60% interest in Wodgina Lithium Project. 2. Other comprises of amounts advanced ($27m); purchase of shares under employee share plans ($18m); other non-cash movement in borrowings ($9m); less proceeds from disposal of 14 financial asset

  15. Slide 15: Revenue And Earnings

    REVENUE AND EARNINGS Revenue ($m) Underlying EBITDA ($m) Underlying NPAT ($m) 3,734 1,901 1,103 2,125 1,624 1,512 765 1,458 506 334 464 433 270 206 205 15

  16. Slide 16: Free Cashflow Generation

    FREE CASHFLOW GENERATION Operating Cash Flow1, 2 Cumulative Free Cash Flow Capex ($m) ($m) ($m) 3, 4 810 1,642 745 1,412 391 342 674 586 216 411 56 135 296 186 (520) Maintenance Deferred Strip Growth 1. FY19 includes $163m working capital cash outflow from inventory build at Koolyanobbing iron ore a

  17. Slide 17: Value Creation Outcomes

    VALUE CREATION OUTCOMES Return on Invested Capital After Tax Cumulative Returns to Shareholders MRL Share Price Performance Since Listing Growth in Dividends ($b) Total Shareholder Returns 10 Years to 30 June 2021 60% $7.0 900 800 50% $6.0 700 40% $5.0 600 30% $4.0 500 20% $3.0 400 300 10% $2.0 200

  18. Slide 18: Operational Performance

    OPERATIONAL PERFORMANCE © Hboces

  19. Slide 19: Our Business

    OUR BUSINESS World’s largest crushing contractor Leading pit-to-port mining services provider World’s top 5 lithium miner with joint ownership of the largest hard rock lithium deposit Australia’s 5th largest iron ore producer Largest acreage holder of exploration permits in Perth and Carnarvon Basin

  20. Slide 20: FY21 Mining Services Performance

    FY21 MINING SERVICES PERFORMANCE MINING SERVICES CRUSHING AND CONSTRUCTION ENERGY MARINE PROCESSING • 3 new contracts • 26 operating plants • Wonmunna infrastructure • Perth Basin – seismic • Transhipper design - and mine development survey completed – drilling completed • 5 renewals • 3 new crushin

  21. Slide 21: FY19 To FY21 Mining Services Performance

    FY19 TO FY21 MINING SERVICES PERFORMANCE Mining Services production-related contract tonnes1,2 Mining Services less construction EBITDA4 140 250 2.5 229 228 124 125 CAGR 30%3 Mining Services less Construction EBITDA ($m) 120 110 200 189 2.0 EBITDA per Contract Tonne ($/WMT) 102 182 100 Contract tonn

  22. Slide 22: FY21 Commodities Performance

    FY21 COMMODITIES PERFORMANCE YILGARN HUB UTAH POINT HUB MT MARION WODGINA KEMERTON IRON ORE IRON ORE SPODUMENE SPODUMENE LITHIUM HYDROXIDE TMM 60.3Mt TMM 41.1Mt TMM 30.2Mt Care and maintenance Construction ongoing Produced 11.0Mt Produced 8.5Mt Produced 485kdmt Supporting through MRL equipment and c

  23. Slide 23: Future Direction

    FUTURE DIRECTION 23

  24. Slide 24: Mining Services Growth Strategy

    MINING SERVICES GROWTH STRATEGY Develop innovative, lower carbon mining services materials handling and infrastructure solutions We will do this through: • Growing Tier 1 mining companies’ crushing, processing and haulage contracts • Developing significant transport/port facilities: • Long-term pit-

  25. Slide 25: Commodities Iron Ore

    COMMODITIES IRON ORE Current operating iron ore hubs • Yilgarn Hub • Parker Range – bring into production 1Q FY22 • Commence drilling Mt Richardson 1H FY22 • Utah Point Hub • Wonmunna – increase to 10Mtpa • Lamb Creek – end CY22 Next 3 years develop 2 new iron ore hubs • Ashburton • 30Mtpa operation

  26. Slide 26: Commodities Lithium

    COMMODITIES LITHIUM • Mt Marion at full production • Wodgina – bring back on line • Improving lithium market • Reduce volume of spodumene sold to open market • Add hydroxide capacity – offshore 26

  27. Slide 27: Innovation Key To Our Mining Services Growth

    INNOVATION KEY TO OUR MINING SERVICES GROWTH CRUSHING SOLUTIONS HAULAGE SOLUTIONS MARINE SOLUTIONS CARBON FIBRE TECHNOLOGY NextGen Crushing Jumbo Road Trains Transhipping Vibrating Screens • MRL design and IP • 320T payload • MRL design • MRL design and IP • 5 – 50Mtpa modular construction • Designe

  28. Slide 28: FY22 Guidance

    FY22 GUIDANCE YILGARN HUB UTAH POINT HUB MT MARION WODGINA KEMERTON Commodity Iron ore Iron ore Spodumene Spodumene Lithium Hydroxide Ownership 100% 100% 50% 40% 40% Exports12 10.5 to 11 Mt 10.5 to 11 Mt 450 to 475Kt Care and maintenance Under construction Costs3 Increase 5 to 10% Similar to FY21 Si

  29. Slide 29: Thank You

    THANK YOU 29

  30. Slide 30: Appendix Additional Information

    APPENDIX ADDITIONAL INFORMATION 30

  31. Slide 31: Reconciliation Of Non-IFRS Financial Information

    RECONCILIATION OF NON-IFRS FINANCIAL INFORMATION Reconciliation of Non-IFRS Financial Information 1H20 2H20 FY20 1H21 2H21 FY21 ($ million) Total Revenue 987 1,138 2,125 1,531 2,203 3,734 Underlying EBITDA 330 435 765 763 1,138 1,901 Depreciation and amortisation (92) (102) (194) (104) (154) (258) U

  32. Slide 32: Operating Segments

    OPERATING SEGMENTS • Mining Services growth in FY21 continued to be Operating Segments FY20 FY20 FY20 FY21 FY21 FY21 driven by growth in the iron ore hubs and new ($ million) Revenue Underlying Margin Revenue Underlying Margin EBITDA EBITDA external contracts won during the year Mining Services1 1,2

  33. Slide 33: Mining Services Key Business Metrics

    MINING SERVICES KEY BUSINESS METRICS REVENUE1,2 BY END USER REVENUE1 BY LENGTH OF CONTRACT Iron ore Lithium Gold Construction and Other ≤ 3 yrs 3-5 yrs 5-10 yrs > 10 yrs 1. FY21 Mining Services segment revenue (external and inter-segment). 33 2. MRL’s Mining Services contract rates are not linked to

  34. Slide 34: Mining Services FY15 To FY21 Performance Index

    MINING SERVICES FY15 TO FY21 PERFORMANCE INDEX • Mining Services performance disclosed on an index basis from 1H15 for comparative purposes Mining Services production-related contract tonnes1 Mining Services less construction EBITDA3 Up 20% pcp 350 250 900.0 310 313 229 228 Contract tonnes (Index, r

  35. Slide 35: Commodities Segments

    COMMODITIES SEGMENTS Iron Ore Commodities FY20 FY20 FY20 FY21 FY21 FY21 Segment Revenue Underlying Margin Revenue Underlying Margin • Record exports of 17.3Mt, up 23% due to growth of the ($ million) EBITDA EBITDA Yilgarn Hub Iron Ore 1,553 479 31% 3.057 1,537 50% • Material increase in Platts index

  36. Slide 36: Commodities Yilgarn Hub Iron Ore

    COMMODITIES YILGARN HUB IRON ORE Yilgarn Hub 1H20 2H20 FY20 1H21 2H21 FY21 Lump • 10.5Mt exported in FY21 with conversion to all in Exports Kwmt 1,135 1,824 2,959 1,874 603 2,477 fines strategy in 2H21 resulting in a lower weighting of lump for the year Fe grade % 59.7% 59.2% 59.4% 57.8% 57.5% 57.7%

  37. Slide 37: Commodities Utah Point Hub Iron Ore

    COMMODITIES UTAH POINT HUB IRON ORE Utah Point Hub 1H20 2H20 FY20 1H21 2H21 FY21 Lump • 6.8Mt exported in FY21, 46% Lump Exports Kwmt 1,305 1,417 2,723 1,415 1,727 3,142 • Overall revenue per tonne is higher due to the Fe grade % 59.6% 59.2% 59.4% 58.5% 58.8% 58.7% strong Platts index Moisture % 6.0

  38. Slide 38: Commodities Mt Marion Lithium

    COMMODITIES MT MARION LITHIUM • FY21 spodumene concentrate exports of Mt Marion Lithium 1H20 2H20 FY20 1H21 2H21 FY21 485Kdmt, 70% High Grade Weighted Average Exports (at 100%) Kdmt 188 206 394 203 282 485 • Weaker lithium conditions in 1H21 before a price increase in 2H21 resulted in an overall red

  39. Slide 39: Conservatively Geared Through Cycles

    CONSERVATIVELY GEARED THROUGH CYCLES $2,500 $2,000 $1,500 $1,000 $ million $500 $- $(500) $(1,000) $(1,500) FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Net (Debt)/Cash EBITDA (Underlying) 39

  40. Slide 40: Credit Metrics And Debt Maturity Profile

    CREDIT METRICS AND DEBT MATURITY PROFILE CREDIT METRICS FY20 FY21 DEBT MATURITY PROFILE1 Cash and equivalents $1,522m $1,542m $1,000 931 $900 Net debt/(cash) ($231m) ($280m) $800 Net gearing (11%) (9%) $700 $600 Gross gearing 36% 28% $500 $400 Net cash to Underlying EBITDA (0.3x) (0.1x) $300 250 Gro

  41. Slide 41: FY22 Capital Expenditure Guidance

    FY22 CAPITAL EXPENDITURE GUIDANCE CAPEX ($ million) FY22 Commodities 140 Mining Services 64 Ashburton Hub development 69 Central & Corp Office & Other 53 Total Growth Capex 326 Deferred Stripping 132 Commodities 144 Mining Services 30 Central & Other 18 Total Sustaining Capex 324 Total Capex 650 1.

  42. Slide 42: Glossary

    GLOSSARY 1H, 2H, FY First half, second half, full year Net debt / (cash) Gross debt less cash and cash equivalents $ Australian dollar pcp Prior corresponding period US$ United States dollar ROIC Return on invested capital CAGR Compound annual growth rate T or t Wet metric tonnes unless otherwise st

  43. Slide 43: Disclaimer

    DISCLAIMER This presentation should not be considered as an offer or invitation to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in the Company will be entered into

  44. Slide 44: Investor Relations

    INVESTOR RELATIONS James Bruce Head of Investor Relations T: +61 8 9329 3706 E: james.bruce@mrl.com.au OFFICE: 1 Sleat Road, Applecross, WA 6153 POSTAL: PO Locked Bag 3, Canning Bridge LPO, Applecross, WA 6153 P +61 8 9329 3600 F +61 8 9329 3601 www.mrl.com.au ASX:MIN

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