Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — Macquarie Forum 2018
28 slides from Fortescue's conference presentation, Oct 15, 2018
Slide 1: Fortescue Metals Group Macquarie Forum September 2018
For personal use only Fortescue Metals Group Macquarie Forum September 2018
Slide 2: Disclaimer: Forward looking statements
Forward looking For personal use only statements Disclaimer Important Notice Additional Information The purpose of this presentation is to provide general information about Fortescue This presentation should be read in conjunction with the Annual Report at Metals Group Limited ("Fortescue"). It is n
Slide 3: Building a world class company
Building a world class company For personal use only Shipped over Core supplier 1 billion to China tonnes Low cost 170mt producer Annual production rate 03 FY18 Full Year Results
Slide 4: Safety and unique culture
Safety and unique culture For personal use only Looking out 3.7 for our mates TRIFR 23% 94% reduction Safety and Culture SIFR survey participation 04 FY18 Full Year Results
Slide 5: Delivering FY18 results
Delivering For personal use only FY18 results TRIFR 3.7 170mt C1 cost Shipped US$12.36/wmt A$0.23per share 24% US$4.0bn Total dividends Net gearing Gross debt 62% of FY18 NPAT 06 FY18 Full Year Results
Slide 6: Integrated mining and infrastructure operations
Integrated mining and infrastructure operations For personal use only Focus on safety, production and cost 07 FY18 Full Year Results
Slide 7: Placeholder - New Corporate Video
For personal use only • PLACEHOLDER – NEW CORPORATE VIDEO 7
Slide 8: Sustainable cost improvements
Sustainable cost improvements For personal use only C1 US$/wmt 48 44 Structural improvements Solomon + blending + processing 34 27 Productivity and efficiency FY19 Utilisation, recoveries, maintenance 15 Guidance 13 12.36 12 - 13 Innovation and technology Autonomy, gas, ore carriers, data analysis F
Slide 9: Financial performance
Financial performance For personal use only 15 FY18 Full Year Results
Slide 10: FY18 financial outcomes
FY18 financial outcomes For personal use only US$3.2bn US$1.1bn US$878m Underlying Underlying NPAT Reported NPAT EBITDA US$3.0bn A$ US$863m 0.12per share Cash from Fully franked Cash on hand operations final dividend 16 FY18 Full Year Results
Slide 11: Price and margins
Price and margins For personal use only Cost leadership and efficient operations generating cash margins US$/dmt 140 120 100 80 60 40 20 51 30 17 21 20 - FY14 FY15 FY16 FY17 FY18 Underlying EBITDA, US$/dmt 62 Platts CFR Index, US$/dmt 19 Fortescue realised price, US$/dmt Avg Underlying EBITDA, US$/d
Slide 12: Cash flows
Cash flows For personal use only Generating strong underlying cashflows from operations US$m Net cash from operations US$m Capital expenditure US$m Free cash flows 4,256 4,000 4,000 4,000 3,540 3,000 3,000 3,000 2,000 2,000 2,000 1,601 1,000 890 1,000 1,000 716 711 - - - FY17 FY18 FY17 FY18 FY17 FY1
Slide 13: Credit metrics
Credit metrics For personal use only Key metrics reflecting financial strength Gross gearing (%) Net gearing (%) 56 56 45 49 49 31 38 29 21 24 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 Gross debt to underlying EBITDA (x) Net debt to underlying EBITDA (x) 3.8 2.9 2.1 1.7 1.6 1.2 1.3 0.9 1.0 0
Slide 14: Capital allocation
Capital allocation For personal use only Increased returns to shareholders following rapid de-gearing of balance sheet FY16 – US$3.1bn FY17 – US$4.0bn FY18 – US$2.2bn Capital expenditure Net debt repayments Dividends 25 FY18 Full Year Results
Slide 15: FY19 capital expenditure
FY19 capital expenditure For personal use only Disciplined capital allocation, investing in the core iron ore business, innovation and growth 80 Sustaining capital ~$3.50/wmt 100 100 Investing in innovation 580 Exploration and growth 340 Eliwana mine and rail Project Sustaining capital Eliwana Explo
Slide 16: Market
Market For personal use only 29 FY18 Full Year Results
Slide 17: Diverse product suite
Diverse For personal use only product suite Excellent value in use CISA Iron Ore Technical Application Higher sintering productivity Forum Quality control and product consistency 018
Slide 18: Eliwana mine and rail project
Eliwana mine For personal use only and rail project US$1.275bn capital investment Underpins West Pilbara 143kms rail; 30mtpa dry OPF Fines Initial strip ratio 1.1:1 First ore on train Dec 2020 10 FY18 Full Year Results
Slide 19: West Pilbara Fines
West Pilbara For personal use only Fines WPF Platts First shipment scheduled Dec 2018 Benchmark Iron content (Fe) 60.1 61.5 Alumina (Al2O3) 2.3 - 2.5 2.3 5-10mt in FY19 Silica (SiO2) 4.3 - 4.5 3.7 Phosphorous (P) 0.08 – 0.09 0.1 Growing to ~40mtpa for 20+ years on completion of Eliwana 20 FY18 Full
Slide 20: Growth and development
Growth and development For personal use only 42 FY18 Full Year Results
Slide 21: Embracing technology
Embracing technology For personal use only World leading autonomous Autonomous Relocatable haulage drills Conveyor technology Data analytics Remote Fortescue Ore Systems and integrated Carriers processes operations centre Purpose built 22 FY18 Full Year Results
Slide 22: Significant Pilbara footprint for long life production
Significant Pilbara footprint for long life production For personal use only 44 FY18 Full Year Results
Slide 23: Active exploration
Active For personal use only exploration Pilbara NSW Iron ore, lithium ~2,000km2 tenure South South Australia America ~6,000km2 tenure Ecuador, Colombia Argentina 45 FY18 Full Year Results
Slide 24: Focussed strategy
Focussed strategy For personal use only 46 FY18 Full Year Results
Slide 25: FY19 Guidance
FY19 Guidance For personal use only 165-173mt US$12-13/wmt Shipments C1 cost US$1.2bn Dividend policy 50-80% Capital spend pay-out of NPAT 47 FY18 Full Year Results
Slide 26: Key strategic focus
Key strategic focus For personal use only Balance sheet strength Long term sustainability Growth and development options Returns to shareholders 48 FY18 Full Year Results
Slide 27: Fortescue: The New Force in Iron Ore
For personal use only Fortescue The New Force in Iron Ore www.fmgl.com.au Ww FortescueNews WE minderoo
Slide 28: Glossary
Glossary For personal use only C1 - Operating costs of mining, processing, rail and port on a per tonne basis, Underlying EBITDA - Earnings before interest, tax, depreciation and amortisation, including allocation of direct administration charges and production overheads. exploration, development an