LYNAS CORPORATION FY18 RESULTS ANALYST & INVESTOR PRESENTATION 1
Disclaimer This Presentation has been prepared by Lynas Corporation Limited (ABN 27 009 066 648) (Lynas or financial position and performance are also forward-looking statements. Forward-looking statements, the Company) This Presentation contains summary information about Lynas and its subsidiaries opinions and estimates provided in this Presentation are based on assumptions and contingencies (Lynas Group) and their activities current as at the date of this Presentation. The information in this which are subject to change without notice, as are statements about market and industry trends, Presentation is of general background and does not purport to be complete or to comprise all the which are based on interpretations of current market conditions. Such forward-looking statements information that a shareholder or potential investor in Lynas may require in order to determine including projections, guidance on future earnings and estimates are provided as a general guide whether to deal in Lynas shares. It should be read in conjunction with Lynas Group’s other periodic only and should not be relied upon as an indication or guarantee of future performance. There can and continuous disclosure announcements lodged with the Australian Securities Exchange (ASX), be no assurance that actual outcomes will not differ materially from these forward-looking which are available at www.asx.com.au. This document is not a prospectus or a product disclosure statements. statement under the Corporations Act (Cth) 2001 (Corporations Act) and has not been lodged with Investment Risk and other risks ASIC. An investment in Lynas shares is subject to investment and other known and unknown risks, some Not investment or financial product advice of which are beyond the control of Lynas Group, including risk factors associated with the industry in This Presentation is for information purposes only and is not financial product or investment advice which Lynas Group operates, such as: nature of mineral exploration and production; mineral and ore or a recommendation to acquire Lynas shares and has been prepared without taking into account reserves; operations risks; project development risks; market price and demand risk; credit and the objectives, financial situation or needs of individuals. Before making an investment decision, market risks; regulatory, political and environmental risks; tax and other risks generally relating to prospective investors should consider the appropriateness of the information having regard to their equity investment. own objectives, financial situation and needs and seek financial, legal and taxation advice Not an offer appropriate to their jurisdiction. Lynas is not licensed to provide financial product advice in respect of Lynas shares. Cooling off rights do not apply to the acquisition of Lynas shares. This Presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States. Any securities described in this Presentation have not been, and will Financial data not be, registered under the U.S. Securities Act of 1933 (the “Securities Act”). All dollar values are in Australian dollars (A$) unless stated otherwise and financial data is presented Disclaimer within the financial year end of 30 June 2018 unless stated otherwise. Any pro forma historical financial information included in this Presentation does not purport to be in compliance with Article Lynas and its affiliates, officers, employees, agents and advisers have not authorised, permitted or 11 of Regulation S-X of the rules and regulations of the US Securities and Exchange Commission. caused the issue, dispatch or provision of this Presentation to any third party. Lynas, its related bodies corporate and their respective affiliates, officers, employees, agents and advisers to the Future performance maximum extent permitted by law, expressly disclaim all liabilities in respect of any expenses, Past performance information given in this Presentation is given for illustrative purposes only and losses, damages or costs incurred by you as a result of the information in this Presentation being should not be relied upon as (and is not) an indication of future performance. This Presentation inaccurate or due to information being omitted from this Presentation, whether by way of negligence contains certain “forward - looking statements”. The words “expect”, “should”, “could”, “may”, “will, or otherwise, and make no representation or warranty, express or implied, as to the fairness, “predict”, “plan”, “scenario”, “forecasts”, “anticipates” “estimates” and other similar expressions are currency, accuracy, reliability or completeness of information. The information in this Presentation intended to identify forward-looking statements. Indications of, and guidance on, future earnings and remains subject to change without notice. 2
FY18 Results: Highlights ▪ Maiden NPAT of $53.1m as Rare Earths company (FY17: restated loss of $0.5m) ▪ EBIT increased to $81.0m (FY17: loss of $14.5m) Record Profit ▪ EBITDA increased to $121.9m (FY17: $29.4m) ▪ Revenue grew to $374.1m (FY17: $257.0m) NPAT $53.1m ▪ Gross profit grew to $121.1m (FY17: $14.7m) EBIT $81.0m ▪ Total REO production of 17,753 tonnes (FY17: 16,003 tonnes) EBITDA $121.9m ▪ NdPr production of 5,444 tonnes (FY17: 5,223) ▪ Positive cash flows from operating activities of $118.5m (FY17: $34.0m) ▪ Principal amount of loan facilities reduced to US$165.2m (FY17: US$425.0m) ▪ Substantial progress on $35 million Lynas NEXT project 3
FY18 Result: Improved performance on all key metrics Production Volume Sales Volume (tonnes) 20,000 17,672 20,000 17,753 Others Sales 16,003 18,000 18,000 14,615 NdPr Sales 16,000 16,000 12,631 12,513 14,000 14,000 12,000 12,000 REOt 8,799 REOt 10,000 7,883 10,000 8,000 8,000 6,000 6,000 4,000 4,000 5,444 5,223 2,000 3,896 5,360 5,219 2,000 3,900 2,258 2,262 0 0 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 NdPr (RTS) Others (RTS) Total PF Volume Cash Flow Sales Revenue (A$'m) (excl. AELB, Interest & Debt payments) 450 140 400 Sales Revenue (Gross) 120 350 100 300 80 A$'mil A$'m 250 60 200 40 150 20 100 0 FY15 FY16 FY17 FY18 50 -20 0 -40 FY15 FY16 FY17 FY18 -60 4
A proven and profitable producer ▪ Key Metrics Lynas is a proven and profitable producer of specialty Rare Earth materials positioned to benefit from accelerating demand ASX Ticker LYC ISIN AU000000LYC6 for Rare Earths from key markets in Asia, Europe and the US Shares Outstanding as at 6 662,547,136 ▪ We operate a high grade mine in Mt Weld, Western Australia September 2018 and a reliable, sustainable chemical processing operation in Cash Balance (30 June 2018) A$42.3m Kuantan, Malaysia Debt as at 6 September 2018 US$150m JARE ▪ Lynas is the only miner and processor of Rare Earth materials US$15.24m Conv outside China and the second largest producer of Neodymium- Bond Praseodymium (NdPr) in the world Enterprise Value A$1.4b ▪ Lynas adopts a comprehensive approach to safety and sustainability and complies with all licence conditions in both locations ▪ We have developed quality, long term relationships with key customers around the world ▪ In FY18, Lynas reduced debt and increased EV by nearly 5 times 5
Lynas is evolving to a strong specialty materials business 928 metres of kilns and Lynas adds value to its tunnel rich Mt Weld resource furnaces 4 rotary kilns (60m long) 8 tunnel furnaces (88m long) 46 Plate & Frame Pressure Filters 44 High Speed Centrifuges 1,000 Solvent Extraction Stages Quality specs as low as <50ppm for some impurities A Tier 1 high grade, long life resource 6
Sustainability: Lynas leading the market Environmental best Resource optimisation Delivering to customer Ongoing community practice & water management needs engagement Our first priority is safety. We continue to optimise We meet the sustainability We contribute to our local We have a policy of zero flotation techniques to needs of our customers communities in Malaysia harm for our people, our improve ore utilisation. through our transparent and in Mt Weld through communities and the We have implemented best product supply chain, regular programs and environment. practice water management material traceability and events and support for We have industry leading systems to improve water environmental standards. those in need. health, safety and recycling. environmental practices throughout our operations. 7
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