Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — Shareholder Meeting (November 2016)
40 slides from Fortescue's shareholder meeting presentation, Nov 9, 2016
Slide 1: Annual General Meeting 9 November, 2016
For personal use only Annual General Meeting 9 November, 2016
Slide 2: Forward looking statements
Forward looking statements For personal use only 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 Report at 30 Fortescue Metals Group Limited ("Fortescue"). It is not recom
Slide 3: CEO Presentation
For personal use only CEO Presentation
Slide 4: Building a world class company
Building a world class company Core supplier to China’s growth For personal use only Safety focus First ore Low cost Engagement Empowerment Leadership in 2008 producer Shipped over 165-170mt Production rate 760mt Unique culture 3
Slide 5: Placeholder - new corporate video
For personal use only • PLACEHOLDER – NEW CORPORATE VIDEO 5
Slide 6: Our Vision: The safest, lowest cost, most profitable iron ore producer
Our Vision: The safest, lowest cost, most profitable iron ore producer v Fortescue i Determination The New Force in Iro! Set yourself stretch targets Enthusiasm Empowerment Generating ideas
Slide 7: Delivering on targets
Delivering on targets For personal use only Focus on safety, productivity and efficiency Safety 165-170mt shipped Productivity + efficiency Debt repayments Consistent dividend policy 7
Slide 8: Safety performance improves year on year
Safety performance improves year on year For personal use only Significant improvement since FY11 Total Recordable Injury Frequency Rate 16 14.4 Rolling 12 month 14 12 10 9.2 TRIFR 8 7.6 6.0 6 5.1 4.3 4 3.4 2 0 FY11 FY12 FY13 FY14 FY15 FY16 Q1 FY17 8
Slide 9: FY16 Results
FY16 Results For personal use only Operational performance delivers sustainable cost reductions and financial results 169.4mt US$3.2bn US$5.2bn Shipped Underlying Net debt EBITDA C1 Cost US$985m A$ 12 cent $15.43/wmt Final dividend 43% reduction NPAT Refer to attached glossary for definition of non-
Slide 10: Clear and focussed strategy
Clear and focussed strategy For personal use only Alignment of marketing and operations to deliver ongoing productivity and efficiency 10
Slide 11: Continuous + sustainable cost improvements
Continuous + sustainable cost improvements Sept ’16 quarter US$13.55/t – productivity and efficiency delivering cost savings For personal use only US$/wmt 1 Solomon operations 60 50 48 44 2 Blending strategy 58% Fe 40 34 3 Processing, wet plants + de-sands 30 27 15 4 Operational efficiencies 20 10 $
Slide 12: FY16 Highlights
FY16 Highlights For personal use only Earnings increase driven by significant cost performance US$m Revenue US$m Underlying EBITDA US$m NPAT 985 10,000 3,500 1,000 3,195 8,574 8,000 7,083 2,800 800 2,506 6,000 2,100 600 4,000 1,400 400 316 2,000 700 200 - - - FY15 FY16 FY15 FY16 FY15 FY16 17% 27% 21
Slide 13: Strong positive cash margins
Strong positive cash margins For personal use only Applied to reduce debt + gearing levels Net cash flow from operations Free cash flows US$m Net debt US$m US$m 10,000 4,000 4,000 8,000 7,188 3,023 3,000 3,000 2,719 6,000 5,188 2,037 2,000 2,000 1,411 4,000 1,000 1,000 2,000 - - - FY15 FY16 FY15 FY1
Slide 14: Debt maturity
Debt maturity For personal use only Flexibility to continue early repayments prior to first maturity in June 2019 6,000 5,000 4,000 US$m 3,000 2,976 2,000 2,160 1,000 0 478 0 CY2016 0 CY2017 CY2018 CY2019 CY2020 CY2021 CY2022 Senior Secured Credit Facility Senior Unsecured Notes Senior Secured Notes
Slide 15: FY17 on track
FY17 on track For personal use only Operational performance delivering financial results and cashflows Safety C1 Cost 3.4 $13.55/wmt TRIFR On target to US$12-13 Prioritise cash for debt 43.8mt Shipped for the quarter repayment 15
Slide 16: Iron ore supply in balance
For personal use only Mt 20 40 60 80 0 100 120 140 160 180 Jul-10 Sep-10 Nov-10 Jan-11 Source: Bloomberg and Umetal Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Iron ore supply in balance Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Price and iron ore port stocks remaini
Slide 17: 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 2016 Source: Metalytics 26 May 2016 17
Slide 18: Delivering superior returns to our shareholders
Delivering superior returns to our shareholders For personal use only Fortescue leading the ASX 100 Resources Index (FY17 year to date) 250% 200% 150% Return (%) 100% 50% 0% -50% FMG S&P/ASX 100 Resources S&P/ASX 50 Source: Bloomberg. Total shareholder return is calculated as the cumulative daily sh
Slide 19: People and culture
People and culture Underpinned by our core values For personal use only 19
Slide 20: Supporting our community
Supporting our community For personal use only
Slide 21: Building strong communities
Building strong communities For personal use only Creating opportunities through training, employment and business development 21
Slide 22: Championing diversity
Championing diversity For personal use only Workplace culture fundamental 22
Slide 23: Strategic delivery
Strategic delivery Culture, continuous improvement, speed and flexibility For personal use only Sustainable low cost World class producer assets & people Customer focus Unique culture Reliable drives performance Competitive
Slide 24: Chairman's Presentation
For personal use only Chairman’s Presentation
Slide 25: People, innovation, performance
People, innovation, performance For personal use only Clear and consistent strategy
Slide 26: Delivering results
Delivering results For personal use only Value for our shareholders
Slide 27: Board and Governance focus
Board and Governance focus For personal use only Diversity our core strength
Slide 28: Strong differentiated culture
Strong differentiated culture For personal use only Delivering against stretch targets
Slide 29: Minderoo Foundation
Minderoo Foundation For personal use only Fortescue success supporting key philanthropic ventures 29
Slide 30: Fortescue's success is directly impacting lives
Fortescue’s success is directly impacting lives For personal use only 30
Slide 31: For personal use only
For personal use only 31
Slide 32: Business of the Meeting
Business of the Meeting For personal use only
Slide 33: 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 2016. Further Information Mr Stephen Pearce, Fortescue’s CF
Slide 34: 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 2016 be approved and adopted.” Further
Slide 35: Resolution: Adoption of Remuneration Report - Proxy Results
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 2016 be approved and adopted.” Proxy Re
Slide 36: Re-election of Ms Elizabeth Gaines
Resolution 2 For personal use only Re-election of Ms Elizabeth Gaines To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That Ms Elizabeth Gaines be re-elected as a Director of the Company.” Further Information • Ms Gaines, who has an interest in the Resolu
Slide 37: Re-election of Ms Elizabeth Gaines - Proxy Results
Resolution 2 For personal use only Re-election of Ms Elizabeth Gaines To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That Ms Elizabeth Gaines be re-elected as a Director of the Company.” Proxy Results FOR AGAINST OPEN TO CHAIR OPEN TO OTHER 2,533,355,64
Slide 38: Re-election of Ms Sharon Warburton
Resolution 3 For personal use only Re-election of Ms Sharon Warburton To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That Ms Sharon Warburton be re-elected as a Director of the Company.” Further Information • Ms Warburton, who has an interest in the Res
Slide 39: Re-election of Ms Sharon Warburton - Proxy Results
Resolution 3 For personal use only Re-election of Ms Sharon Warburton To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That Ms Sharon Warburton be re-elected as a Director of the Company.” Proxy Results FOR AGAINST OPEN TO CHAIR OPEN TO OTHER 2,535,494,24
Slide 40: For personal use only
For personal use only www.fmgl.com.au @FortescueNews Proudly supporting:
Fortescue Metals Group — Shareholder Meeting (November 2016) on 6ix