Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — Shareholder Meeting (October 2019)
47 slides from Whitehaven Coal's shareholder meeting presentation, Oct 17, 2019
Slide 1: Annual General Meeting – Chairman's Address and Managing Director's Presentation
17 October 2019 The Manager, Listings Australian Securities Exchange Company Announcements Office Via ASX Online Dear Sir, Annual General Meeting – Chairman’s Address and Managing Director’s Presentation We attach copies of the Chairman’s Address and Managing Director’s Presentation which will be de
Slide 2: Chairman's Address
WHITEHAVEN COAL AGM 2019 17 October 2019 Chairman’s Address Fellow shareholders, Ladies and Gentlemen Can I take this opportunity to formally welcome you to the Whitehaven Coal Annual General Meeting for the financial year ending 2019. I would also like to formally acknowledge the Gadigal people of
Slide 3: Chairman's Address (continued)
right attitude and, while culture is a continuing journey, I am confident we can rise to meet the challenges presented by our growth agenda. In this context, the Company has put its strong balance sheet to work and will continue to do so by investing in technology and expansion initiatives at existi
Slide 4: Chairman's Address: governance and closing
Finally to governance, and I am pleased that earlier this year, we welcomed Lindsay Ward to the Board. Lindsay is a highly credentialed Director and senior executive with a wealth of experience across a range of sectors where Whitehaven’s strategic interests converge, including mining, exploration,
Slide 5: Whitehaven Coal Limited AGM
Whitehaven Coal Limited AGM Presentation 2019 17 October 2019
Slide 6: Disclosure
Disclosure 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 GROWTH OR OTHER TREND PROJECTIONS AND ANY ESTIMATE
Slide 7: Contents
Contents Highlights Financial Performance Operations Growth Sustainability Outlook for Coal Use Outlook for Whitehaven Appendices 3
Slide 8: FY2019 Highlights
FY2019 Highlights Record EBITDA, NPAT, Dividends and ROM coal production TRIFR of 6.16 at 30 Record equity Equity sales Record Underlying Record returns to June, 11% below the ROM coal including EBITDA and NPAT shareholders with a previous year and production purchased coal before significant final
Slide 9: Safety performance
Safety performance Improvement continuing Safety (TRIFR) and Production (ROM Mt) 25 • Safety as measured by the TRIFR continued to improve over the year 20 • Whitehaven recorded a TRIFR of 6.16 at the end of the 15 year compared to 6.91 at the end of the previous year • Safety is always a key focus
Slide 10: Financial performance
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Slide 11: Financial highlights
Financial highlights Record profit; record dividends; strong balance sheet Profit and Loss FY2019 FY2018* Comment Net profit after tax before significant items ($m) 564.9 524.5 Increase of 8% Underlying EBITDA ($m) 1,041.7 1,011.9 Increase of 3% Net Profit ($m) 527.9 524.5 Earnings per share (cps) 5
Slide 12: Margins and costs
Margins and costs Margins increased due to higher realised premiums on thermal coal FY2019 FY2018 • Realised thermal and metallurgical coal prices averaged US$100/t and US$119/t respectively in FY2019 compared to US$98/t and US$119/t in FY2018 Coal Sales (equity basis, excluding Mt 15.6 16.0 purchas
Slide 13: Free cash flow
Free cash flow Majority of free cash flow returned to shareholders FY2019 net cash from operating activities $916m Dividends Investing Debt Retirement Lease payments Other $496m $194m $127m $93m $6m • Total FY2019 declared • Includes $47m sustaining • Senior debt and ECA net • Primarily fleet equipm
Slide 14: Operations
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Slide 15: Coal production and sales
Coal production and sales Stable production & sales before next growth phase Whitehaven Managed ROM Coal Production (Mt) Whitehaven Managed Coal Sales (Mt) 25.0 23.2 25.0 23.1 22.9 22.1 21.6 20.5 20.7 20.1 1.3 0.4 1.6 20.0 20.0 0.1 9.7 15.8 11.0 11.7 7.8 7.4 14.0 8.9 9.6 15.0 15.0 9.3 2.6 1.8 10.0 7
Slide 16: Sales to premium markets
Sales to premium markets Most sales to premium markets in Asia Thermal Coal Sales FY2019 Metallurgical Coal Sales FY2019 7% 5% 5% Japan Korea 8% India Taiwan Korea 12% Malaysia Japan 40% Indonesia 11% Vietnam Other SE Asia China 59% New Caledonia Other India 14% Taiwan Other 13% 16% • Managed coal s
Slide 17: Maules Creek
Maules Creek Planning for autonomous haulage and expansion Maules Creek Managed ROM Coal Production (Mt) 14.0 • Record ROM coal production of 11.7Mt as the mine continued to ramp up to its approved production rate of 13Mtpa ROM coal 12.0 • Revised marketing strategy leading to more coal washing and
Slide 18: Narrabri
Narrabri One of the most productive underground mines in Australia Narrabri Managed ROM Coal Production (Mt) 9.0 • A strong final quarter lifted ROM coal production to 6.4Mt, above the 8.0 revised guidance range for the year 7.0 • New higher capacity hydraulic cylinders to be installed at the next l
Slide 19: Gunnedah open cuts
Gunnedah open cuts Equipment for Tarrawonga expansion arriving at the mine Gunnedah Open Cuts ROM Coal Production (Mt) 7.0 • ROM coal production for the Gunnedah Open Cuts including Sunnyside was 5.1Mt for the year 6.0 • Both Rocglen and Sunnyside are fully in rehabilitation phase 5.0 • Lower produc
Slide 20: Drought and water security update
Drought and water security update • Taking steps to support water security as drought conditions persist in North West NSW • Water supply at Narrabri Underground and Gunnedah open cuts considered low risk • Primary water source for Maules Creek is a high security water licence drawing upon the Namoi
Slide 21: Growth
Growth
Slide 22: Portfolio overview
Portfolio overview Whitehaven operates a growing business of long life mines Assets Approved LOM Comments Production Mine ramping up to the approved level. Preparatory work underway for Maules Creek 13Mtpa ROM >35 years 16Mtpa modification request Work on the Stage 3 project well advanced with the E
Slide 23: Vickery economics
Vickery economics Whitehaven’s next mine • Evaluation of JV formation to progress • Project capex is estimated to be Fast facts once draft approval conditions issued by similar to Maules Creek ~ $700m the Government are known (likely Q4 CY2019), targeting users of thermal and • Indicative life of mi
Slide 24: Vickery Project status update
Vickery Project status update Working through the approval process EIS Lodgement (including Flood Assessment) • Response to Submissions submitted in August 2019 • DPIE Whole of Government review issued Q4 CY2019 Comments from public, agencies and councils • IPC forms new Panel Q4 CY2019 Submissions
Slide 25: Winchester South – a strategic project
Winchester South – a strategic project Strategic coking coal exposure in the heart of Queensland’s Bowen Basin • Well located and close to Peak Downs, Poitrel, Daunia and Eagle Downs • Queensland Government strongly supports the project • Preliminary Capex estimate of ~$800 million, excluding mining
Slide 26: Winchester South Project status update
Winchester South Project status update Working through the approval process with a co-operative QLD Government Coordinated Project Declaration • 20+ years of historical project work has been EA and ML Applications reassessed • Large diameter coal quality drilling program EIS Terms of Reference Publi
Slide 27: Sustainability
Sustainability
Slide 28: Contribution to our stakeholders
Contribution to our stakeholders Whitehaven FY2019 $464.9 million $333.9 million 75% $323.8 million returned to spent with of 2,400-strong contributed to shareholders local suppliers workforce federal, state and based in local governments regional areas in taxes and royalties 21.6Mt 9% $515,000 $1.8
Slide 29: Whitehaven is viewed positively in the region where we operate
Whitehaven is viewed positively in the region where we operate Whitehaven’s reputation in 95% 94% 95% Awareness of WHC the Gunnedah, Narrabri, Tamworth and Liverpool Very positive Plains local government 15% 13% 17% areas has improved over the Somewhat positive last few years 26% 29% 27% Neutral +2%
Slide 30: Responsible environmental management
Responsible environmental management Air quality 20,000 37,000 Real-time management hectares of hectares leased monitoring to through monitoring land-based for agriculture1 manage noise, air and dust biodiversity quality and blast suppressants offsets1 vibration 1 compared to 3,560 hectares of land
Slide 31: Business resilience and climate change
Business resilience and climate change Committed to understanding & reporting climate related risk • Whitehaven reports against the voluntary Current Policies Scenario expected warming of 6°C by 2100 framework recommended by the Financial International Energy Agency World Energy Outlook Stability Bo
Slide 32: Our analysis indicates our business is resilient
Our analysis indicates our business is resilient 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 is expected to remain
Slide 33: Outlook for coal use
Outlook for coal use EN WHITEHAVEN COAL
Slide 34: Coal significant in energy mix
Coal significant in energy mix IEA projects coal to retain position as largest source of electricity in 2040 World Primary Energy Demand NPS World Share of Electricity • The IEA New Policies Scenario (Mtoe) Generation 2040 (NPS) (NPS) projects coal demand to 18,000 increase from 5.35Btce in 2017 to
Slide 35: Thermal coal – Global supply and demand
Thermal coal – Global supply and demand Demand forecast to increase in Whitehaven’s key markets, supply to remain flat Thermal Coal Supply (Mt) Thermal Coal Demand (Mt) 1,200 1,500 1,000 800 1,000 600 500 400 200 0 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013 2014 2015 2016 2017 201
Slide 36: Why the growth in demand from India & SE Asia?
Why the growth in demand from India & SE Asia? Increasing per capita electricity consumption to drive higher demand Electricity Consumption per Capita 2017 (kWh) Southeast Asia Electricity Generation IEA NPS (TWh) 9,000 8,000 2,500 Developed 7,000 Developing 2,000 6,000 5,000 1,500 4,000 1,000 3,000
Slide 37: Demand for higher quality thermal coal
Demand for higher quality thermal coal Remains robust as the efficiency of the global fleet increases SC / USC coal-fired plants become the Global coal demand by boiler type And the increasing adoption of SC / USC generation (NPS) ‘technologies of choice’ • Higher-energy, lower-impurity coals are st
Slide 38: Metallurgical coal – Global supply and demand
Metallurgical coal – Global supply and demand Forecast demand outstrips forecast supply Metallurgical Coal Supply (Mt) Metallurgical Coal Demand (Mt) 400 400 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013 2014 2015 2016 2017 2018
Slide 39: Whitehaven coal sales
Whitehaven coal sales JKT remain our major customers for high CV thermal & India an emerging market for our metallurgical coal Sales by Coal Type (Mt) Sales by Country (Mt) 16 14 FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY17 FY18 FY19 14 12 12 10 10 8 8 6 6 4 4 2 2 0 1 2 Japan Korea Ta
Slide 40: Outlook for Whitehaven
Outlook for Whitehaven BlEPr Ey a yr ' fa
Slide 41: ROM coal production profile
ROM coal production profile ROM coal production grows from ~ 23Mt in FY2019 to ~ 50Mt when fully ramped • Production is set to grow strongly over the next ten Whitehaven Managed ROM Coal Production (Mt) years through a combination of greenfield and brownfield developments across the business 60 • Th
Slide 42: Targets for FY2020
Targets for FY2020 Preparing for ramp up of growth Operational Financial • Continue improving safety performance • Return surplus capital to shareholders • Deliver ROM coal production guidance in the range of 22.0Mt • Maintain the existing strong balance sheet to 23.5Mt (100% basis) • Ensure that co
Slide 43: Thank you
Thank you www.whitehavencoal.com.au
Slide 44: Appendices
Appendices
Slide 45: Resources
Resources Whitehaven Coal Limited – Coal Resources – August 2019 Measured + Indicated Tenement Measured Resource (A) Indicated Resource (B) Inferred Resource (C) Competent Person Report Date (A + B) CL375 AUTH346 ML1701 Maules Creek Opencut* ML1719 382 174 556 44 1 Mar-19 Narrabri North ML1609 147 1
Slide 46: Reserves
Reserves Whitehaven Coal Limited – Coal Reserves – August 2019 Recoverable Reserves Marketable Reserves Report Tenement Competent Person Proved Probable Total Proved Probable Total Date Maules Creek CL375 AUTH346 340 120 460 310 100 410 1 Mar-19 Opencut* Narrabri North ML1609 102 5 107 98 4 102 2 Ma
Slide 47: IEA New Policies Scenario
IEA New Policies Scenario The International Energy Agency’s central scenario Note: The New Policies Scenario provides a measured assessment of where today’s policy frameworks and ambitions, together with the continued evolution of known technologies, might take the energy sector in the coming decade