Ferrexpo plc · LSE:FXPO
Ferrexpo — Wood & Company Emerging Europe Conference 2020
19 slides from Ferrexpo's conference presentation, December 2020
Slide 1: Wood & Company Emerging Europe Conference
2020 Wood & Company Emerging Europe Conference December 2020
Slide 2: Presentation Topics
P R E S E N TAT I O N T O P I C S • INTRODUCTION TO FERREXPO • OVERVIEW OF THE PELLET MARKET • OVERVIEW OF THE BUSINESS - Near term of growth of the business - New higher grade products, new markets - Reinvesting for sustainable growth - High margin business - Disciplined capital allocation • ESG CR
Slide 3: Introduction to Ferrexpo
INTRODUCTION TO FERREXPO CORPORATE OVERVIEW FERREXPO PLC BOARD OF DIRECTORS – London Listed (Premium Listing) since 2007 – Constituent of FTSE250 and FTSE4Good indices – Share Structure Jim North Lucio Genovese Kostyantin Zhevago • Share price: £2.251 Acting Chief Executive Officer Non-executive Cha
Slide 4: Established Iron Ore Pellet Producer
E S TA B L I S H E D I R O N O R E P E L L E T P R O D U C E R ORE RESERVES ESTABLISHED FOR FURTHER LOGISTICS 55 YEARS NETWORK OF PRODUCTION (BASED ON CURRENT PROCESSING RATE) 35 GLOBALLY SIGNIFICANT 30 PREMIUM CENTRAL & EASTERN EUROPE Pellet Exports in 2019 (Mt) 25 CHINA & SOUTH EAST ASIA 36% PELLE
Slide 5: Iron Ore Pellet Market
Iron Ore Pellet Market 4
Slide 6: Premium Market Within Iron Ore Space
P R E M I U M M A R K E T W I T H I N I R O N O R E S PA C E ROLE OF IRON ORE PELLETS GLOBAL EXPORT VOLUMES IN 2019 – Iron ore pellets represent less than 10% of global export trade of Pellets, 8% iron ore1. Pellet feed, 6% – Pellets are a premium product used in steelmaking to produce high-end stee
Slide 7: Current Trends in Iron Ore & Outlook
CURRENT TRENDS IN IRON ORE & OUTLOOK TRENDS OBSERVED IN 2020 MARKET INDICES IN 2020 – Iron ore prices strengthened in 2020 due to strong demand in 160 China, and supply disruption from Australia and Brazil – Atlantic pellet premiums remained consistent 140 – China pellet premiums falling through sum
Slide 8: Company Overview
Company Overview 7
Slide 9: Overview of the Business
OVERVIEW OF THE BUSINESS ESTABLISHED, CASH GENERATIVE BUSINESS GLOBAL PRESENCE – Ferrexpo’s operations in Ukraine have been operating for over 40 – Iron ore pellets are a premium product for the global steel years, with three operating subsidiaries – Ferrexpo Poltava industry Mining, Ferrexpo Yerist
Slide 10: Near Term Growth Opportunities
NEAR TERM GROWTH OPPORTUNITIES CONCENTRATOR EXPANSION PROJECT NOW ONLINE – Expansion project, Section 9, completed in 2020 and in process of test work and ramp up in 2H 2020 – Replicates existing processing configuration, delivering 1.5-2.0Mt per annum of additional concentrate for pelletisation (or
Slide 11: DR Pellets – Expansion into New Markets
D R P E L L E T S – E X PA N S I O N I N T O N E W M A R K E T S LATEST PHASE OF QUALITY EXPANSION PROJECT CONTINUOUSLY IMPROVING PELLET GRADES SINCE IPO – Ferrexpo has progressively improved its product mix since listing, 100% increasing the average grade to 65% Fe and commencing 90% production of
Slide 12: Re-investing for Sustainable Growth
R E - I N V E S T I N G F O R S U S TA I N A B L E G R O W T H Investments For Growth Investments In New Mines – Concentrator expansion completed 2020 – Ferrexpo the first company to open a new mine in CIS (Yeristovo mine, opened 2011) – 20% growth in production volumes since IPO – Company’s latest
Slide 13: High Margin Business
HIGH MARGIN BUSINESS INVESTMENTS YIELDING PROFITABILITY REVENUE PER TONNE (IRON ORE DIVISIONS) – Ferrexpo’s EBITDA margin per tonne is in line with, or better than 140 Revenue per tonne (US$/t) the Big 4’s iron ore businesses (BHP, Rio, Fortescue, Vale), 120 based on the most recent financial result
Slide 14: Disciplined Capital Allocation
D I S C I P L I N E D C A P I TA L A L L O C AT I O N INVESTMENTS LEADING TO GROWTH IN VOLUME AND QUALITY MAINTAINING A BALANCED DISTRIBUTION OF CAPITAL – Over US$2.5Bn invested in the Company’s assets since IPO in – Draw down of undrawn portion of PXF facility in 2019 2007. – Existing debt faciliti
Slide 15: Contribution to Ukraine
CONTRIBUTION TO UKRAINE #3 2% A CONSISTENT USER AND SUPPORTER OFSTATE INFRASTRUCTURE EXPORTER OF IRON ORE ACCOUNTED FOR 2% OF UKRAINE’S PELLETS IN WORLD TOTAL GOODS EXPORTED IN 2019 ELECTRICITY, GAS, RAILWAYS, PORT +$900M OVER US$900M OF TAXES & ROYALTIES PAID TO +$2.5BN OVER US$2.5 BILLON OF CAPITA
Slide 16: Reducing Our Carbon Footprint
REDUCING OUR CARBON FOOTPRINT FUTURE PLACE IN A LOWER CARBON ECONOMY INVESTING IN ZERO-CARBON TECHNOLOGIES – Ferrexpo’s carbon footprint reported in Annual Reports and standalone Responsible Business Reports, including reporting in 2019 under Taskforce for Climate Change Related Financial Disclosure
Slide 17: Supporting Local Communities
SUPPORTING LOCAL COMMUNITIES SCHOOL INVESTMENT SPORT INVESTMENT SOCIAL CARE INFRASTRUCTURE SINCE 2015 SINCE 2015 SINCE 2015 DEVELOPMENT Olympic rowers Number of vulnerable people SINCE 2015 Number of schools with modernised heatingsystems 2 sponsored by Ferrexpo at the 2016 games. Both won helped Nu
Slide 18: Concluding Remarks
CONCLUDING REMARKS 1. Ferrexpo represents a well-invested, high margin business 2. Company showed flexibility in adapting to COVID-19 market conditions during Q2 and Q3. Pellet premiums showing return to normal levels in Q4. 3. Near term volume growth with recently-completed concentrator expansion 4
Slide 19: Thank you
Thank you 18
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