Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — Shareholder Meeting (October 2020)
43 slides from Whitehaven Coal's shareholder meeting presentation, Oct 22, 2020
Slide 1: 2020 AGM Addresses and CEO Presentation
22 October 2020 For personal use only TO: ASX Market Announcements FROM: Company Secretary SUBJECT: 2020 Annual General Meeting – Addresses and Managing Director and CEO Presentation Please find attached the following which will be delivered at the Company’s Annual General Meeting being held today a
Slide 2: Chairman's Address to the Annual General Meeting
The Hon. Mark Vaile AO Chairman, Whitehaven Coal For personal use only Address to the Whitehaven Coal Annual General Meeting 22 October 2020 Ladies and Gentlemen and shareholders FY20 was not a year anyone could have predicted. Even for our sector, which is accustomed to cyclical lows, it has proven
Slide 3: Chairman's Address (continued)
Our desire for more consistent and predictable operational performance in particular – which we have already seen in Q1 of FY21 – is underpinned by a number of fresh faces and deep sectoral experience in the operational leadership team. For personal use only The fundamentals of our business remain s
Slide 4: Director election remarks
can make a valuable contribution to the Whitehaven Board and, should I be elected, look forward to working with my fellow Directors and management to continue the expansion of Whitehaven Coal. Thank you. For personal use only RAY ZAGE: Thank you everybody for taking the time to attend the AGM. In te
Slide 5: Managing Director and CEO Address
For personal use only Paul Flynn Managing Director and CEO, Whitehaven Coal Address to the Whitehaven Coal Annual General Meeting 22 October 2020 Thank you, Chairman. Welcome everyone to Whitehaven Coal’s 2020 Annual General Meeting, our first virtual AGM. Today I’ll re-cap on Whitehaven’s financial
Slide 6: CEO address: environment and safety
We recognise environmental compliance is an area where we must address some more recent shortcomings. While our year-on-year record of environmental compliance is good considering the growing scale of the business, FY20 outcomes did not reflect our own expectations, or what our community and other s
Slide 7: CEO address: liquidity and FY20 results
As reported in our September 2020 Quarter Production Report, which was issued last week, this strong liquidity level remains unchanged from 30 June. For personal use only We have now agreed with our Banking Syndicate a revised interest cover ratio covenant that will ensure we have added flexibility
Slide 8: CEO address: FY21 production guidance
Looking forward to FY21, we are guiding ROM production of 3.7-4.1Mt. The guidance reflects Tarrawonga with increased production year on year due to the commissioning of the new fleet, partially offset by an increase in strip ratio in the first half. For personal use only We are expecting a slight in
Slide 9: CEO address: Vickery and Winchester South
Recently, we were pleased to receive approval from the NSW Independent Planning Commission for our 10 million tonne per annum metallurgical and thermal coal Vickery Extension Project. It is now proceeding through the federal approvals process. For personal use only Vickery will not only add an addit
Slide 10: CEO address: climate and FY21 outlook
This year, we continued to review and address climate-related risks and opportunities, as outlined in our 2020 Sustainability Report, which was released in September. As part of this work, Whitehaven reported against the voluntary framework recommended by the Financial Stability Board’s Task Force o
Slide 11: Whitehaven Coal Limited October 2020
Whitehaven For personal use only Coal Limited AGM Presentation 2020 22 October 2020
Slide 12: Disclosure
Disclosure For personal use only FORWARD LOOKING STATEMENTS STATEMENTS CONTAINED IN THIS MATERIAL, PARTICULARLY THOSE REGARDING THE POSSIBLE OR ASSUMED FUTURE PERFORMANCE, COSTS, DIVIDENDS, RETURNS, PRODUCTION LEVELS OR RATES, PRICES, RESERVES, POTENTIAL GROWTH OF WHITEHAVEN COAL LIMITED, INDUSTRY G
Slide 13: Whitehaven's strategy
Whitehaven’s strategy For personal use only Our strategy is to own and operate large, lower-cost mines producing a mix of high energy thermal coal and premium semi-soft coking coal, and to increase our share of the growing market for these products in our region. 3
Slide 14: Our purpose is to support regional communities
Our purpose is to support regional communities For personal use only We exist to support and sustain regional communities by exporting high-quality thermal and metallurgical coal from Australia to the world. In doing so, our vision is to be the benchmark coal investment on the ASX by owning and oper
Slide 15: Our purpose in action
Our purpose in action For personal use only • We offer sustainable, long-term, FY20 rewarding career opportunities in regional areas • We invest in skills development with a strong focus on creating pathways for 75% 9% 12.2% young people who come from the of 2,500-strong of workforce female areas ar
Slide 16: Holistic approach to addressing Indigenous disadvantage
$3.15 million We take a spent with 9 Indigenous suppliers in Supporting families For personal use only holistic FY20 approach to Procurement Healthcare addressing Indigenous disadvantage Cultural Education awareness & training Empowering the local training Indigenous community through intergeneratio
Slide 17: Environmental management responsibilities
We take our environmental management For personal use only responsibilities seriously Air quality 22,000 103 hectares 38% management through hectares of land- rehabilitated of water monitoring and dust based biodiversity on mine sites recycled suppressants offsets1 in FY20 in FY20 in FY20 42,000 Rea
Slide 18: Record safety performance
Record safety performance For personal use only Safety is always a key focus for us Record safety performance with TRIFR of 4.13 as at 30 June 2020 25 ROM coal production (Mt) 20 20.6 and TRIFR 15 10 5 4.13 0 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Q1 FY21 ROM coal production (Mt
Slide 19: Local communities increasingly view us positively
Local communities increasingly view us positively For personal use only Drivers of the statistically significant Local community sentiment towards Whitehaven Coal increase in positive, and decrease in 60 negative sentiment include growing community recognition of: 50 • Local employment 40 • Broadeni
Slide 20: FY20 operational and financial highlights
FY20 operational and financial highlights For personal use only Production Safety Vickery Earnings Liquidity $1bn Senior 20.6Mt 4.13 TRIFR1 Extension $306m $468.8m Debt Facility managed a company Project EBITDA refinanced ROM record IPC approval to July 2023 production received 1 Total recordable in
Slide 21: Financial highlights
Financial highlights For personal use only Earnings and cash generation impacted by softer coal prices Profit and Loss ($m) FY2020 FY2019 Comment Underlying EBITDA 306.0 1,041.7 Decrease in global COAL Newcastle Index price, SSCC prices, increased costs and decreased sales volumes Underlying net pro
Slide 22: EBITDA
EBITDA For personal use only • Lower USD coal prices in FY20 compared with FY19 were partially offset by a weaker Australian dollar • As a result of lower ROM production and the mine closure of Rocglen, sales volumes were 1.3mt below FY19 • Unit costs were higher in FY20 than FY19 $m 1,200 1,000 Rea
Slide 23: Maules Creek
Maules Creek For personal use only • For FY20 managed ROM production was down 8% at Managed ROM Coal Production (Mt) 10.7Mt vs pcp of 11.7Mt • During the year, Maules Creek operations were impacted by the previously reported labour shortages, and dust and Guidance 10.7 smoke events associated with d
Slide 24: Narrabri
Narrabri For personal use only • For FY20 managed ROM production was down 5% at Managed ROM Coal Production (Mt) 6.1Mt vs pcp of 6.4Mt • In April Narrabri recorded 1.0Mt ROM production – the second time in its history that it has recorded a 6.1 Guidance million tonne month range • Q2 FY20, 8 week lo
Slide 25: Gunnedah open cuts
Gunnedah open cuts For personal use only • For FY20 managed ROM production was down 24% at Managed ROM Coal Production (Mt) 3.9Mt vs pcp of 5.1Mt as Rocglen entered into rehabilitation phase in the final weeks of FY2019 and Sunnyside entering into rehabilitation phase in August 2019 • For the contin
Slide 26: Capital allocation
Capital allocation For personal use only We balance prudent debt levels with providing returns to shareholders and investing to sustain and expand production Senior bank facility net of cash A$m 140 1,000 Strong thermal coal pricing – provided capital allocation optionality 120 800 100 gC Newc USD/t
Slide 27: Financing
Financing For personal use only Strong liquidity, no near term maturities and diversified sources of capital Secured senior debt facility ECA2 Finance leases Bank guarantees3 Liquidity as at 30 June $638.0m drawn as at 30 June $68.1m as at 30 June $216.3m as at 30 June $454.3m as at 30 June $468.8m
Slide 28: Growth portfolio overview
Growth portfolio overview For personal use only Whitehaven operates a growing business of long life mines Assets Approved Production1 LOM • Potential mine ramp up to 16Mtpa ROM with the roll out of AHS2, commencement Brownfield projects Maules Creek 13Mtpa ROM >30 years of in-pit dumping and 16Mtpa
Slide 29: Vickery Extension Project
Vickery Extension For personal use only Project • Up to 10Mtpa metallurgical and thermal coal open-cut mine in NSW’s Gunnedah Basin • Approval from the Independent Planning Commission NSW received 12 August 2020 • Next steps • Federal approvals process • Secondary approvals and management plans • Fi
Slide 30: Winchester South
Winchester South For personal use only • Up to 15Mtpa metallurgical and thermal open-cut coal mine in Queensland’s Bowen Basin • A focus on project optimisation and approval • PFS Technical and Infrastructure studies well progressed • Maiden JORC Reserves by the end of 2020 • Draft EIS assessment by
Slide 31: Narrabri Stage 3 expansion
Narrabri Stage 3 For personal use only expansion • Extending LOM from 2031 to 2044 • EIS studies completed, submission Q3 2020 • Engineering Studies further advanced • Ventilation & Gas management • Geotechnical • Conveyor Design • HV Power design • Coal Quality • Large Diameter boreholes complete •
Slide 32: Economic recovery in Asia
Economic recovery in Asia For personal use only Whitehaven exports thermal and metallurgical coal to Asia ex-China South East Asia economic growth North East Asia economic growth (percentage change in real GDP/GNP year-on-year) (percentage change in real GDP/GNP year-on-year) 10.0 5.0 5.0 Global eco
Slide 33: Coal price recovery
Coal price recovery For personal use only …inline with global economic growth recovery Forecast coal prices USD/t 110 100 90 80 70 60 50 40 2020 2021 2022 2023 2024 CRU spot price 6,000 kcal/kg FOB Newcastle IHS spot price 6,000 kcal/kg FOB Newcastle CRU contract prices semi-soft coking coal FOB Aus
Slide 34: Contributing to the Paris Agreement goals
Contributing to the Paris Agreement goals For personal use only Each of our customer countries are signatories to the Paris Agreement or have domestic policies consistent with the outcomes of the Paris Climate Conference, COP21. Our largest customer, Japan, has included high- quality coal as a key c
Slide 35: Our business has a strong future
Our business has a strong future For personal use only High quality product portfolio aligned to forecast demand in nearby markets • Our strategy is to own and operate large, lower-cost mines, We exist in a supportive policy producing a mix of high quality thermal and metallurgical coal. and regulat
Slide 36: Business resilience and climate change
Business resilience and climate change For personal use only Committed to understanding & reporting climate related risk • Whitehaven reports against the voluntary International Energy Agency World Energy Outlook scenarios Current Policies Scenario expected warming of 6°C by 2100 framework recommend
Slide 37: Our analysis indicates our business is resilient
Our analysis indicates our business is resilient For personal use only Stress-testing our portfolio against the IEA scenarios Scenario testing Analysis outcomes • Is there a sufficient market • Based on fundamental market analysis, the future of the Australian coal demand to sell our products sector
Slide 38: FY2021 guidance
FY2021 guidance For personal use only FY21 FY21 Key Elements per 26/8/20 release per 15/10/20 release Comments Managed ROM Coal Production Mt 21.0–22.8 unchanged Maules Creek Mt 11.3–12.0 unchanged Narrabri Mt 6.0–6.7 unchanged Gunnedah Open Cuts Mt 3.7–4.1 unchanged Managed Coal Sales Mt 18.5–20.0
Slide 39: Focus for FY21
Focus for FY21 For personal use only Improve operational outcomes and maintain a strong balance sheet • Operational compliance improvement • Operational focus – productivity and cost improvements (Project STRIVE) • AHS roll out at Maules Creek • Obtain Federal approvals for the Vickery Expansion pro
Slide 40: Thank you
Thank For personal use only you www.whitehavencoal.com.au
Slide 41: Appendices
For personal use only Appendices
Slide 42: Resources
Resources For personal use only Whitehaven Coal Limited – Coal Resources – August 2020 Measured Resource Indicated Resource Measured + Indicated Inferred Resource Competent Report Tenement (A) (B) (A + B) (C) Person Date Maules Creek Opencut* CL375 AUTH346 ML1701 ML1719 372 174 546 44 1 Mar-20 Narra
Slide 43: Reserves
Reserves For personal use only Whitehaven Coal Limited – Coal Reserves – August 2020 Recoverable Marketable Competent Person Report Tenement Reserves Reserves Proved Probable Total Proved Probable Total Date Maules Creek CL375 AUTH346 330 120 450 300 100 400 1 Mar-20 Opencut* Narrabri North ML1609 9