New Hope Corporation Limited · ASX:NHC

New Hope — Shareholder Meeting (November 2014)

52 slides from New Hope's shareholder meeting presentation, Nov 20, 2014

  1. Slide 1: Welcome - 12th Annual General Meeting

    NEW HOPE CORPORATION LIMITED Welcome 12th Annual General Meeting 20 November 2014

  2. Slide 2: Disclaimer

    DISCLAIMER IMPORTANT: The information in this document has been provided to you for information only by New Hope Corporation Limited (“NHC”) and is subject to change without notice. Nothing contained in this document constitutes investment, legal, tax or other advice. The information in this documen

  3. Slide 3: Chairman's Review

    CHAIRMAN’S REVIEW Mr Robert Millner, Chairman

  4. Slide 4: Key Highlights FYE July 2014

    KEY HIGHLIGHTS FYE 31 July 2014 • Significant improvement in safety performance • Challenging coal market environment continues – Low US$ prices – AUD:USD remains relatively high although recent falls improve A$ margins • Profit after tax totals $58.4 million: – $10.8 million from coal mining, marke

  5. Slide 5: Financial Overview

    FINANCIAL OVERVIEW FY 2014 12 Months Ended 31 July (cents per share) 2014 2013 Earnings per share 7.0 8.9 Interim Dividend 6.0 6.0 Final Dividend to be paid in November 2014 2.0 5.0 Special Dividend to be paid in November 2014 3.5 5.0 Dividends paid to shareholders over the past five years totals $8

  6. Slide 6: Quarterly Update 1st Quarter FY 2015

    QUARTERLY UPDATE 1st Quarter FY 2015 Quarter Ended 31 October (million tonnes) 2014 2013 Change Raw Coal Production 2.814 2.940 -4% Saleable Coal Production 1.484 1.513 -2% Coal Sold 1.566 1.460 7% QBH Export Throughput 1.903 2.269 -16% Current year financial results are ahead of last year’s compara

  7. Slide 7: Quarterly Update Key Points

    QUARTERLY UPDATE 1st Quarter FY 2015 Key Points • Safety performance continues to improve across the group with the twelve month moving average total reportable injury frequency rate (TRIFR) declining from 23 as at October 2013 to 16 at the end of this quarter; a 30% improvement. • Despite Australia

  8. Slide 8: 2014 Annual General Meeting

    2014 ANNUAL GENERAL MEETING Mr Shane Stephan, Chief Executive Officer

  9. Slide 9: Safety Performance

    SAFETY PERFORMANCE EMERGENCY RESPONSE TEAM TRAINING

  10. Slide 10: Safety Performance - Quarterly TRIFR

    SAFETY PERFORMANCE Quarterly TRIFR Performance 60 50 40 30 TRIFR Linear (TRIFR) 20 10 0 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 10 | 20 November 2014

  11. Slide 11: Safety Performance FY 2014

    SAFETY PERFORMANCE FY 2014 • Significantly improved performance with fewer people being injured • All lagging indicators improved over FY 2013 – TRI’s down 7% – LTI’s down 15% – HPI’s down 50% • Concentration through i-Safe/We-Safe behavioural program on individual responsibility and Safe Production

  12. Slide 12: Production and Sales

    PRODUCTION AND SALES NEW HOPE GROUP

  13. Slide 13: Production & Sales Performance FY 2014

    PRODUCTION & SALES PERFORMANCE FY 2014 Australian Operating Results 7,000 Production Sales 6,000 Tonnes - 000's 5,000 4,000 3,000 2,000 1,000 - 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Years ended 31 July 13 | 20 November 2014

  14. Slide 14: Production & Sales Tonnages

    PRODUCTION & SALES TONNAGES FY 2014 12 Months Ended 31 July (million tonnes) 2014 2013 Change ROM Coal Production 11.046 11.405 -3% Saleable Coal Production 5.637 5.826 -3% Coal Sold 6.003 5.985 0% • Scheduled closure of New Oakleigh mine impacting production – Lower cost per tonne towards the end o

  15. Slide 15: Coal Production Volumes

    COAL PRODUCTION VOLUMES FY 2014 12 Months Ended 31 July (million tonnes) 2014 2013 Change New Acland 4.92 4.69 5% New Oakleigh 0.00 0.27 -100% Jeebropilly 0.72 0.87 -17% TOTAL 5.64 5.83 -3% 15 | 20 November 2014

  16. Slide 16: Coal Sales Volumes

    COAL SALES VOLUMES FY 2014 12 Months Ended 31 July (million tonnes) 2014 2013 Change Export 5.85 5.80 1% Domestic 0.16 0.19 -16% TOTAL 6.00 5.99 0% • One third of export sales are premium low ash coal with pricing based on the JFY annual price • The balance of export sales is higher ash coal sold on

  17. Slide 17: Financial Overview

    FINANCIAL OVERVIEW NEW HOPE GROUP

  18. Slide 18: Financial Overview

    FINANCIAL OVERVIEW FY 2014 12 Months Ended 31 July (A$m) 2014 2013 Change % Revenue from ordinary activities 549.0 652.1 - 16% Earnings before interest tax depreciation and 131.1 170.5 - 23% amortisation^ Earnings before interest and tax^ 71.2 122.0 - 42% Profit before income tax 71.0 122.0 - 42% Ne

  19. Slide 19: Group NPAT Comparison

    GROUP NPAT COMPARISON 160 140 14.7 3.8 3.3 120 100 67.8 64.7 80 8.8 74.1 17.5 60 2.4 58.4 40 20 2013 Non regular Mining Bridgeport Sales Sales Price Sales FX Treasury Other 2014 items Operations Operations Allocation Variance Variance 19 | 20 November 2014

  20. Slide 20: Cost Management

    COST MANAGEMENT NEW HOPE GROUP

  21. Slide 21: Cost Control

    COST CONTROL Many Australian Coal Miners Lost Control of Costs New Hope Did Not 21 | 20 November 2014

  22. Slide 22: Cost Control - Management & Productivity Initiatives

    COST CONTROL Cost management & productivity initiatives • Efficiency reviews resulted in redundancies of 45 employees and a reorganisation of mining operations and head office structure. Production levels have been maintained • Administration costs have been reduced during 2014 by 25% to $12.2m • Ma

  23. Slide 23: Community and Sustainability

    COMMUNITY AND SUSTAINABILITY

  24. Slide 24: Our People - The New Hope Advantage

    OUR PEOPLE The New Hope Advantage • We recruit and retain the best people for the job • Very experienced senior management team • Ensure a safe and healthy workplace, incorporating well- being initiatives • Provide development and training opportunities • Plan and structure for future growth opportu

  25. Slide 25: Community & Social Responsibility

    COMMUNITY & SOCIAL RESPONSIBILITY Working together to maintain our Social Licence to Operate • New Hope actively partners with, and supports, its local communities • Our Community Reference Group at Acland provides insight on local topics which informs company decision making • We contribute around

  26. Slide 26: Community & Social Responsibility

    COMMUNITY & SOCIAL RESPONSIBILITY Working together to maintain our Social Licence to Operate “The New Hope Group plays an invaluable role in supporting vital services and events that make this a great place to live and raise a family.” 26 | 20 November 2014

  27. Slide 27: Sponsorships and Donations FY 2014

    COMMUNITY & SOCIAL RESPONSIBILITY Sponsorships and Donations FY 2014 Amberley Girl Guides Inc Committee Rosewood Hack & Pony Club The Salvation Army Anglican Parish of Rosewood Goombungee Golf Club Inc Marburg and Districts Residents Rosewood Lions Club Toowoomba and Surat Basin Enterprise Army Avia

  28. Slide 28: Rehabilitation - Land Management

    REHABILITATION Land Management • New Hope is committed to the progressive rehabilitation of disturbed land across its operations • Rehabilitation is progressive and occurs right behind the mining activities • Acland Pastoral Company (APC) manages around 2,400 head of cattle on 4,000 hectares of land

  29. Slide 29: Rehabilitation - Acland

    REHABILITATION Acland • The aim of rehabilitation is to return land to beef cattle production as soon as possible • 307 Ha of land fully rehabilitated to date • Cattle are routinely grazing on rehabilitated land at New Acland • Stage 2 - Cattle Trials commenced in Jan 2013:  Monitors soil character

  30. Slide 30: Rehabilitation - New Oakleigh

    REHABILITATION New Oakleigh • 3.5 mbcm of overburden returned to West pit since January 2013 • A further 6 months work required to complete • End use: Cattle grazing and large lot residential 30 | 20 November 2014

  31. Slide 31: New Acland Continuation Plan

    NEW ACLAND CONTINUATION PLAN

  32. Slide 32: Revised New Acland Coal Mine Stage 3 Project Highlights

    REVISED NEW ACLAND COAL MINE STAGE 3 PROJECT Highlights New Hope has presented a revised Project to the Office of the Queensland Coordinator-General, which would: • Continue the mine until approximately 2029, supporting approximately 435 operational jobs at peak, construction jobs of up to 260, plus

  33. Slide 33: Revised New Acland Project Progress

    REVISED NEW ACLAND COAL MINE STAGE 3 PROJECT Progress Forecast Timetable: • EIS submitted January 2014 • EIS public comment period ended 3 March 2014 • Additional Information on EIS submitted Q3 2014 • Coordinator-General Report anticipated Q4 2014 • Environmental Authority Conditions finalised 2015

  34. Slide 34: Oil and Gas

    OIL AND GAS NEW HOPE GROUP

  35. Slide 35: Oil and Gas - Bridgeport Energy

    OIL AND GAS Bridgeport Energy • Strong safety performance with 32 months LTI free • Annual production of 159,000bbl up 46% on previous year • Oil production increased to 11,000 barrels/month at year end • New development wells in Utopia field (2) and Cuisinier field (4) plus five exploration wells a

  36. Slide 36: Coal to Liquids

    COAL TO LIQUIDS • Indirect Liquefaction • Construction of Stage 1 Jeebropilly plant (1 TPH) completed • Gas engine commissioning completed • Technical and commercial review to be completed Q4 2014 to determine ongoing plans 36 | 20 November 2014

  37. Slide 37: Port Operations

    PORT OPERATIONS NEW HOPE GROUP

  38. Slide 38: QBH - Port Operations

    QBH - PORT OPERATIONS • QBH exported 7.9Mt for the year on 100 vessels • QBH remains essentially a demurrage free port • QBH management and staff maintained the strong safety performance, this year delivering 2 years Lost Time Injury (LTI) free • QBH monitors the air quality for dust particles in su

  39. Slide 39: QBH - Cost Savings

    QBH - PORT OPERATIONS Cost Savings • Various cost saving initiatives were undertaken throughout the period with a Dozer Hours Reduction Project delivering significant savings • The chart below summarizes the results of the project 39 | 20 November 2014

  40. Slide 40: Outlook

    OUTLOOK NEW HOPE GROUP

  41. Slide 41: Coal Price - Market Context

    COAL PRICE Market Context Price  Thermal coal prices have been in decline since the start of 2011 due to a combination of new supply and weakening growth in China  It is estimated that approximately 20% of Australian thermal coal mines are currently operating at negative cash margins  Very few Au

  42. Slide 42: Coal Market Outlook

    COAL MARKET OUTLOOK • Seaborne thermal coal markets will remain oversupplied for some time • However current pricing levels are unsustainable in the longer term and are stimulating change • China is taking action to reduce domestic supply and concurrently reduce imports of other than premium coals •

  43. Slide 43: World Electricity Generation

    World electricity generation 30000 25000 20000 1990 2011 2020 Bcoal Boil mgas nuclear hydro mother renewable bree.gov.au ; NEW HOPE 43 | 20 November 2014 GROUP

  44. Slide 44: Electricity Consumption per Person and Population

    Electricity consumption per person and population OECD countries typically have small 4900 populations that consume a lot of 12000 electricity per person. 1200 10000 1000 8000 800 6000 Conversely developing countries have larger 600 populations that consume small volumes of 4000 electricity per pers

  45. Slide 45: Electricity Generation Capacity Under Construction and Approved

    Electricity generation capacity under construction and approved 350 300 250 200 150 100 50 Gw — coa hydre gas nuclear the: renewables Non-OECD bree.gov.au i NEW HOPE 45 | 20 November 2014 ae eve

  46. Slide 46: Australia's Thermal Coal Exports

    Australia’s thermal coal exports 250 200 150 100 50 Mt 1998-99 2014-15 ASb 2002-03 2006-07 2010-11 2014-15 2018-19 mmm volume —value (rhs) LS SD 46 | 20 November 2014 NEW HOPE GROUP

  47. Slide 47: New Hope Group Strategic Vision - Points of Focus

    NEW HOPE GROUP STRATEGIC VISION Our points of focus  A commitment to meet or exceed our legal, financial, safety and environmental obligations; and the expectations of our shareholders  Retain a high calibre team with the right culture  Deliver safe, efficient and cost effective production outcom

  48. Slide 48: Proxy Results - Annual General Meeting

    PROXY RESULTS Annual General Meeting – 20 November 2014 Resolution 1 - Remuneration Report Proxies in favour of FOR AGAINST OPEN TOTAL ABSTAIN Chairman 612,402,089 2,582,559 833,081 615,817,729 230,310 Other Attendees 0 40,000 460,913 500,913 0 Total 612,402,089 2,622,559 1,293,994 616,318,642 230,3

  49. Slide 49: Appendix

    APPENDIX NEW HOPE GROUP

  50. Slide 50: Reconciliation of Non-IFRS Financial Information

    RECONCILIATION OF NON-IFRS FINANCIAL INFORMATION 12 Months Ended 31 July (A$m) 2014 2013 Net profit after tax 58.4 74.1 Income Tax 19.9 49.4 Petroleum Resource Rent Tax (7.3) (1.5) Profit before income tax 71.0 122.0 Interest Expense 0.2 0.0 Earnings before interest and tax 71.2 122.0 Depreciation 5

  51. Slide 51: newhopegroup.com.au

    newhopegroup.com.au

  52. Slide 52: Global Energy Challenge

    GLOBAL ENERGY CHALLENGE In 2035 there will still be one billion people without access to electricity 52 | 20 November 2014

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