Slide 1: Full Year Results Presentation Update
ILUKA RESOURCES LIMITED (ASX:ILU) AUSTRALIAN SECURITIES EXCHANGE NOTICE 24 February 2022 FULL YEAR RESULTS PRESENTATION UPDATE On 24 February 2022 Iluka Resources released its 2021 Full Year results presentation. Slide 10 of that presentation previously referred to a ‘Full Year’ dividend in referenc
Slide 2: 2021 Full Year Results Presentation
1 Iluka Resources 2021 Full Year Results Presentation Tom O’Leary, Managing Director Adele Stratton, Chief Financial Officer and Head of Development Matthew Blackwell, Head of Major Projects and Marketing Capel, Western Australia
Slide 3: Disclaimer and compliance statement
Disclaimer and compliance statement 2 This presentation has been prepared by Iluka Resources Limited (Iluka). By accessing this presentation you acknowledge that you have read and understood the following statement. This document provides an indicative outlook for the Iluka business in the 2022 fina
Slide 4: Chairman succession
Chairman succession 3 • Greg Martin to retire from Board at Annual General Meeting (13 April 2022) ‒ joined Board January 2013; appointed Chairman December 2013 • Rob Cole to be appointed Chairman following Annual General Meeting ‒ joined Board 2018; Chair of People and Performance Committee since 2
Slide 5: Industry backdrop – mineral sands
Industry backdrop – mineral sands 4 Long term supply outlook for zircon and high-grade titanium feedstocks is declining – limited new supply expected to come online in the near term Global zircon supply outlook* Zircon kt 1,500 • Global zircon production declining as mine depletions continue • Suppl
Slide 6: Market backdrop – mineral sands
Market backdrop – mineral sands 5 Iluka is focused on fostering a sustainable pricing environment for its products despite ongoing tightness of supply across key mineral sands markets Solid demand fundamentals Zircon (premium and standard) net realised FOB price US$/t US$/t Zircon 2,500 • Ceramics i
Slide 7: Iluka’s Approach
Iluka’s Approach Iluka is positioned to lead in the response to mineral sands industry and market conditions, both near and longer term, through the company’s operations, development pipeline, financial strength, marketing approach and product suite
Slide 8: Sustainability pillars
Sustainability pillars 7 Iluka’s purpose is to deliver sustainable value Our goal is to be a safe, responsible and sustainable supplier of critical minerals Trusted by our people and communities Responsible for our environment Operate in and provide products for a low carbon world To recognise that
Slide 9: Sustainability outcomes
Sustainability outcomes 8 Iluka developed its first Climate Change Position Statement in 2021 25% 22% 20% DECREASE IN SPIs REPRESENTATION OF WOMEN DECREASE IN LEVEL 3 OR ACROSS AUSTRALIAN GREATER ENVIRONMENTAL FROM 2020 (SERIOUS POTENTIAL INJURIES) OPERATIONS INCIDENTS 25% 742ha 25% DECREASE IN TRIF
Slide 10: Operations
Operations 9 Iluka adjusts the operating settings of its portfolio to optimise production in response to market conditions, optimise costs and improve cash flow. In 2021, the company maintained maximum operating settings, improved recoveries and delivered continuous improvement across its operations
Slide 11: Results overview
Results overview 10 Units 2021 2020 % Change Z/R/SR Production kt 720 585 23 ▲ Z/R/SR Sales kt 868 518 68 ▲ $634m Mineral Sands EBITDA Mineral sands revenue $m 1,486 947 57 ▲ ($342m FY 2020) Mineral sands EBITDA $m 634 342 85 ▲ Mineral sands EBITDA margin % 43 36 19 ▲ MAC EBITDA/share of profit in a
Slide 12: Underlying NPAT – 2021 versus 2020
Underlying NPAT – 2021 versus 2020 11 $m 500 243 450 55 17 ( 13 ) 400 5 ( 25 ) ( 16 ) 18 ( 61 ) 350 ( 63 ) (8) 300 ( 46 ) 315 250 58 200 150 151 100 50 0 31 December Price Volume Mix FX Ilm, monazite Unit COGS Idle & other Major Government MAC / Corporate & Rehab Tax 31 December 2020 & other Project
Slide 13: Net Cash – December 2020 to December 2021
Net Cash – 31 December 2020 to 31 December 2021 12 FY 2021 free cash inflow $300 million $m 600 528 15 (8) (1) 500 400 (150) (54) (14) (7) (12) 1 300 (55) 200 295 100 50 0 0 0 0 0 0 0 0 0 0 0 Net cash 31- Operating cash Dividends rec'd Exploration Interest Tax Capex Return of Other Treasury shares D
Slide 14: Balance sheet and funding capacity
Balance sheet and funding capacity 13 $m Gearing % Net debt (cash), total facilities and gearing 35 1,000 850 28 700 550 21 400 14 250 100 7 -50 0 -200 -350 -7 H1 19 H1 15 H2 15 H1 16 H2 16 H1 17 H2 17 H1 18 H2 18 H2 19 H1 20 H2 20 H1 21 H2 21 Total facilities available Net debt (cash) Gearing* Feat
Slide 15: Deterra Royalties – delivering strong financial outcomes
Deterra Royalties – delivering strong financial outcomes 14 Key Features Iluka holds a 20% interest in Deterra Royalties (ASX: DRR), an ASX-listed resources royalty portfolio manager. This provides a significant source of long-term financial strength. Deterra’s cornerstone asset is BHP’s Mining Area
Slide 16: Project pipeline
Project pipeline 15 High Grade Atacama2 Zircon Titanium Balranald2 SR1 Restart Zircon-in- Euston2 concentrate Sembehun South West2 (ZIC) Wimmera Eneabba P2 Eneabba P3 Rare Earths Notes: 1. Refer to the 2021 Annual Report for additional information. The Mineral Resource (MR) information on this indic
Slide 17: Technical development focus
Technical development focus 16 Iluka’s project pipeline includes a focus on technical development in Australian jurisdictions Balranald Wimmera Atacama • Rutile-rich deposit in the northern Murray Basin, • Potential multi-decade source of critical minerals, in • Located approximately 5-10km north-ea
Slide 18: Markets – zircon
Markets – zircon 17 Ongoing tightness of supply, with strong demand continuing despite tile manufacturers in multiple regions experiencing challenges • FY 2021 sales 355kt (FY 2020: 240kt) Zircon net realised FOB price1 US$/t Result ‒ Q4 sales of 89kt in line with Q3 sales 1,600 • Iluka’s Q1 2022 zi
Slide 19: Markets – high-grade titanium feedstocks
Markets – high-grade titanium feedstocks 18 Tight supply, with all of Iluka’s synthetic rutile and natural rutile either contracted or allocated for H1 2022 US$/t • FY 2021 sales 513kt (FY 2020: 278kt) Rutile net realised FOB price 1600 Result ‒ strong rebound in global demand following pandemic dow
Slide 20: Rare earths diversification
Iluka’s Approach Rare earths diversification
Slide 21: Rare earths overview
Rare earths overview 20 Iluka is advancing its position in rare earths, based on world class assets at Eneabba, Western Australia and Wimmera, Victoria. The company is progressing the Eneabba development in a phased approach, reducing risk and gaining market understanding. The current focus is compl
Slide 22: Eneabba, Western Australia
Eneabba, Western Australia 21 The Eneabba development involves the reclaiming, processing and sale of a strategic stockpile rich in monazite (a mineral containing rare earth elements) and mineral sands Phase 1 – 20% zircon-monazite Phase 2 – 90% monazite concentrate Phase 3 – Fully integrated rare e
Slide 23: Wimmera, Victoria
Wimmera, Victoria 22 Iluka’s Wimmera resource1 is a large-scale deposit located in the Murray Basin, Western Victoria. The development is a potential source of both mineral sands and rare earth bearing minerals (monazite and xenotime). The Wimmera project is currently the subject of a preliminary fe
Slide 24: Summary and outlook
Summary and outlook 23 Iluka is positioned to lead in the response to mineral sands industry and market conditions, both near and longer term, through the company’s operations, development pipeline, financial strength, marketing approach and product suite 2021 key features • Strong demand for all of
Slide 25: Supplementary information
Supplementary information Cataby, Western Australia
Slide 26: Outlook for 2022 – Australian Operations
Outlook for 2022 – Australian Operations 25 Key Parameters 2020 2021 20221 Comments Annual production Zircon kt 174 320 280 Includes 75kt of ZIC Rutile2 kt 52 67 65 Synthetic Rutile kt 227 199 230 Total Z/R/SR kt 453 586 575 Average annual unit costs Includes an additional $25m for SR1 restart and S
Slide 27: Outlook for 2022 – Sierra Rutile
Outlook for 2022 – Sierra Rutile 26 Key Parameters 2020 2021 2022 Comments Annual production Rutile kt 120 129 144 Zircon kt 7 4 5 Represents ZIC production Total Z/R kt 127 133 149 Ilmenite kt 46 52 55 Annual unit costs & capital expenditure Cash costs of production US$m 127 140 145 Unit cash costs
Slide 28: Outlook for 2022 – Group
Outlook for 2022 – Group 27 Key Parameters 2020 2021 2022 Comments Cash costs ($m) Cash costs of production (Z/R/SR) 537 559 660 Ilmenite concentrate and by-product costs 22 20 15 Restructure, idle costs and other non-production 21 33 20 Major projects, exploration and innovation 62 45 40 Includes $
Slide 29: Production costs and margin
Production costs and margin 28 Margin improvement since 2017 with sustainable pricing outcomes aligned with the introduction of higher cost mining operations Production, unit costs, unit revenue and margin Total Z/R/SR production (kt) Unit cash costs excl by-products Z/R/SR produced ($/t) kt and A$/
Slide 30: Inventory position
Inventory position 29 Inventory levels remain within normal range, with higher finished goods inventory compared to H1 2021 • Ongoing tightness of supply with demand outstripping supply across all of Iluka’s products • Balance sheet well positioned to support inventory position Finished goods and wo
Slide 31: Supplementary Information – Production, Sales, Costs, Revenue
Supplementary Information – Production, Sales, Costs, Revenue 30 2021 2020 % change Production Zircon kt 324.2 185.2 75.1 Rutile kt 196.6 172.6 13.9 Synthetic rutile kt 198.7 227.4 (12.6) Total Z/R/SR production kt 719.5 585.2 22.9 Ilmenite – saleable and upgradeable kt 563.7 455.9 23.6 Monazite con
Slide 32: Supplementary Information – Summary Group Results
Supplementary Information – Summary Group Results 31 $ million 2021 2020 % change Mineral sands revenue 1,485.8 947.0 56.9 Mineral sands EBITDA 633.9 342.0 85.4 Mineral sands EBITDA margin % 42.7% 36.1% 18.1 Mining Area C royalty EBITDA / Share of profit from associate 18.4 81.1 n/a Underlying group
Slide 33: Supplementary Information – Income Statement
Supplementary Information – Income Statement 32 A$ million 2021 2020 % change Z/R/SR revenue 1381.9 841.0 64.3 Ilmenite and other revenue 103.9 106.0 (2.0) Mineral Sands Revenue 1,485.8 947.0 56.9 Cash costs of production (579.2) (558.7) 3.7 Inventory movement - cash (67.0) 142.3 (147.1) Restructure
Slide 34: Supplementary Information – Reconciliation of non-IFRS information
Supplementary Information – Reconciliation of non-IFRS information 33 Reconciliation of non-IFRS financial information to profit before tax Expl & JA/MW C/SW US/MB SRL Oth Corp Group Mineral sands revenue 599.6 639.1 14.4 232.7 - - 1,485.8 AASB 15 freight revenue 39.5 19.5 3.9 10.2 - - 73.1 Expenses
Slide 35: Supplementary Information – Prices
Supplementary Information - Prices 34 Weighted Average Price US$/tonne FY H1 Q3 Q4 H2 FY FOB 2020 2021 2021 2021 2021 2021 Zircon Premium and Standard 1,319 1,321 1,487 1,590 1,531 1,414 Zircon (all products including zircon in 1,217 1,254 1,369 1,442 1,406 1,330 concentrate)1 Rutile 1,220 1,224 1,2
Slide 36: For more information contact
For more information contact Luke Woodgate, Group Manager, Investor Relations and Corporate Affairs investor.relations@iluka.com Narngulu, Western Australia