WHITEHAVEN COAL LIMITED — Investor Presentation 2021

Feb 16, 2021

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17 February 2021

HALF YEAR RESULTS PRESENTATION

Authorised for release by the Board of Whitehaven Coal Limited

Investor contact

Sarah McNally +61 2 8222 1155, +61 477 999 238 smcnally@whitehavencoal.com.au

Media contact

Michael van Maanen +61 8222 1171, +61 412 500 351 mvanmaanen@whitehavencoal.com.au

Whitehaven Coal Limited ABN 68 124 425 396 Level 28, 259 George Street, Sydney NSW 2000 | P 02 8222 1100 | F 02 8222 1101 PO Box R1113, Royal Exchange NSW 1225

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Half Year Results FY21

17 February 2021

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Disclosure

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 GROWTH OR OTHER TREND PROJECTIONS AND ANY ESTIMATED COMPANY EARNINGS ARE OR MAY BE FORWARD LOOKING STATEMENTS. SUCH STATEMENTS RELATE TO FUTURE EVENTS AND EXPECTATIONS AND AS SUCH INVOLVE KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES. ACTUAL RESULTS, ACTIONS AND DEVELOPMENTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY THESE FORWARD LOOKING STATEMENTS DEPENDING ON A VARIETY OF FACTORS.

THE PRESENTATION OF CERTAIN FINANCIAL INFORMATION MAY NOT BE COMPLIANT WITH FINANCIAL CAPTIONS IN THE PRIMARY FINANCIAL STATEMENTS PREPARED UNDER IFRS. HOWEVER, THE COMPANY CONSIDERS THAT THE PRESENTATION OF SUCH INFORMATION IS APPROPRIATE TO INVESTORS AND NOT MISLEADING AS IT IS ABLE TO BE RECONCILED TO THE FINANCIAL ACCOUNTS WHICH ARE COMPLIANT WITH IFRS REQUIREMENTS.

ALL DOLLARS IN THE PRESENTATION ARE AUSTRALIAN DOLLARS UNLESS OTHERWISE NOTED.

COMPETENT PERSONS STATEMENT

INFORMATION IN THIS REPORT THAT RELATES TO COAL RESOURCES AND COAL RESERVES IS BASED ON AND ACCURATELY REFLECTS REPORTS PREPARED BY THE COMPETENT PERSON NAMED BESIDE THE RESPECTIVE INFORMATION. GREG JONES IS A PRINCIPAL CONSULTANT WITH JB MINING SERVICES. MAL BLAIK IS A SENIOR CONSULTANT WITH JB MINING SERVICES. PHILLIP SIDES IS A SENIOR CONSULTANT WITH JB MINING SERVICES. BENJAMIN THOMPSON IS A GEOLOGIST WITH WHITEHAVEN COAL. MARK BENSON IS A GEOLOGIST WITH WHITEHAVEN COAL. DOUG SILLAR IS A FULL TIME EMPLOYEE OF RPM ADVISORY SERVICES PTY LTD. MICHAEL BARKER IS A FULL TIME EMPLOYEE OF PALARIS AUSTRALI PTY. TROY TURNER IS THE MANAGING DIRECTOR OF XENITH CONSULTING PTY LTD.

NAMED COMPETENT PERSONS CONSENT TO THE INCLUSION OF MATERIAL IN THE FORM AND CONTEXT IN WHICH IT APPEARS. ALL COMPETENT PERSONS NAMED ARE MEMBERS OF THE AUSTRALASIAN INSTITUTE OF MINING AND METALLURGY AND/OR THE AUSTRALIAN INSTITUTE OF GEOSCIENTISTS AND HAVE THE RELEVANT EXPERIENCE IN RELATION TO THE MINERALISATION BEING REPORTED ON BY THEM TO QUALIFY AS COMPETENT PERSONS AS DEFINED IN THE AUSTRALIAN CODE FOR REPORTING OF EXPLORATION RESULTS, MINERAL RESOURCES AND ORE RESERVES (THE JORC CODE, 2012 EDITION).

THIS DOCUMENT IS AUTHORISED FOR RELEASE TO THE MARKET BY THE BOARD OF WHITEHAVEN COAL LIMITED.

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2

Contents

1. Whitehaven’s Market

2. H1 FY21 Results

3. Guidance for FY21

4. Appendices

Whitehaven’s Market

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Whitehaven’s customer base is in Asia

Whitehaven’s coal products are exported to Asia

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4 18 Japan
2 6 Korea Our coal products are used:
1 1 Taiwan 1. In high efficiency,
India 2 -
low emission (HELE)
1 1 Vietnam
electricity generation
Malaysia - 1 - 1 Philippines
2. to make steel; and
Indonesia 1 -
3. in nickel smelting and
other industrial applications
1 1 New Caledonia
Metallurgical Coal Customers
Thermal Coal Customers
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5

Current coal market dynamics

China's import restrictions on Australian sourced coal

• Whitehaven has no direct exposure to China

Industrial activity gaining momentum

• Increased demand for all fuel types

Impact of weather events

• Northern hemisphere winter

• La Niña

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6

Forecast seaborne thermal coal demand & pricing

Global seaborne thermal coal demand (Mt) By 2025, seaborne imports will recover from 2020 lows

Thermal coal prices, 6,000kcal, US$/t

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Source: CRU January 2021

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7

Whitehaven plays an important role helping customer countries meet their emission targets The benefits of using Whitehaven coal products:

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High CV coal requires less coal to be used to produce energy

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Assists customers
to meet strict
sulphur and
nitrogen emission
limits
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Decreases the ash byproduct of the generation process

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8

WW Working

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H1 FY21 operational and financial highlights COVID’s impact on coal prices eclipsed an improved operational performance

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Safety Production Unit costs 5.41 9.6Mt A$70/t TRIFR[1] managed ROM production

Earnings $37.2m EBITDA

Liquidity $411.8m

1 Total recordable injury frequency rate (TRIFR) - the number of injuries (excluding fatalities) requiring medical treatment per million hours worked

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10

Safety performance Safety is always a key focus for Whitehaven

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Whitehaven recorded
a TRIFR of
5.41
as at 31 December
2020
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25
20
15
10
5 5.41
0
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 H1
FY21
ROM coal production (Mt) Total Recordable Injury Frequency Rate (TRIFR)
and TRIFR
ROM coal production (Mt)
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11

ROM coal production and sales

H1 FY21 ROM production

H1 FY21 Sales supported by stock draw downs

Whitehaven Managed ROM Coal Production (Mt)

Whitehaven Managed Coal Sales (Mt)

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14 13.1
12.2 12.2
12 11.2 11.2 [11.7]
10.9 11.0
10.2
9.6
10 9.3 6.5
5.4 5.5
2.5 4.5 4.4 5.1 5.8
7.5
8 6.2
3.3
5.2
5.7
6
0.1
4.9 3.0 4.2
4 2.9 3.5 3.4 4.2 3.9 2.4 3.6 4.1
2.9
2.6
2.0
2 2.7 2.8 2.5 3.3 2.3 3.8 2.2 3.5 1.9 3.1 2.5 1.8
1.3
0
H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1
FY15 FY15 FY16 FY16 FY17 FY17 FY18 FY18 FY19 FY19 FY20 FY20 FY21
Open Cuts Narrabri Maules Creek Total
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14
11.8
12 10.8 11.4
0.1 10.3 [10.4] 0.7 10.1 [10.3] 0.9 10.0 [10.2] [10.5]
0.3
10 9.3 0.6 0.8 1.0 1.0
1.4
8.0 4.2 4.7
4.1
8 5.0
3.2 4.8
1.8 4.9 4.3 4.1 4.6
6.0 3.8
6
4 3.2 3.9 3.7 3.8 4.0 2.8 3.8 1.9 2.8 2.9 2.8 3.4 2.9
2
2.8 2.3 2.4 2.7 2.2 2.5 2.6 2.7 2.4 2.6 2.0 1.7 2.0
0
H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1
FY15 FY15 FY16 FY16 FY17 FY17 FY18 FY18 FY19 FY19 FY20 FY20 FY21
Open Cuts Narrabri Maules Creek Coal trading Total
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Note: Figures reflect continuing operations and discontinued Sunnyside Mine and Rocglen Mine, both of which have transitioned into rehabilitation

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12

Premium products sold into premium markets Demand for high quality, high CV thermal coal is increasing in the Asian market

• We produce and sell high quality coal products into premium Asian markets

• Managed coal sales , including purchased coal, were 10.5Mt[1] for the half year (9.3Mt thermal and 1.2Mt metallurgical)

• Sales into the growth markets of South East Asia[2] accounted for 10% of total sales for the half

Thermal Coal Sales H1 FY21

Metallurgical Coal Sales H1 FY21

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Japan 8%
2% [2%2% 4%]
3% Korea
10%
4% Taiwan India
4% Malaysia Korea
45% 11%
Thailand Japan
16% New Caledonia 59% Vietnam
Philippines 12% Taiwan
Vietnam
18% Other
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• 1 Includes domestic sales of 0.1Mt

• 2 Vietnam, Malaysia, Philippines, Indonesia

3 Other includes Indonesia (1.8%), Other (1.1%), Pakistan (0.7%), Domestic (0.3%), New Zealand (0.3%).

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13

Maules Creek

Operational improvement

Managed ROM Coal Production (Mt)

Managed ROM production for H1 FY21 24% at 5.2Mt ROM vs pcp of 4.2Mt

• At the end of the half Maules Creek operated through one of the wettest Decembers on record to deliver a confidence-building ROM production and overburden movement result

• Due to the strong first half production performance FY21 guidance has been revised upwards to 11.8-12.4Mt

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Guidance
range
11.8-12.4Mt
H2
11.7
11.0 10.7
9.7
7.8
5.2 H1
2.6
FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021
Actual H2e
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Narrabri

H1 FY21 impacted by geological challenges

Managed ROM Coal Production (Mt)

Managed ROM production for H1 FY21 30% at 2.6Mt ROM vs pcp of 2.0Mt

• During the half the longwall mined through a faulted section of LW109 that resulted in reduced productivity and increased out-ofseam dilution

• Longwall move to LW110 is scheduled for Q4 FY21

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Guidance
range
5.4-6.0Mt
H2
7.7
7.3
6.9
6.3 6.4 6.1
2.6 H1
FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021
Actual H2e
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15

Gunnedah open cuts

Smoothing annual production

Managed ROM Coal Production (Mt)

• Managed ROM production for H1 FY21 35% at 1.8Mt ROM vs pcp of 1.3Mt

• The increase reflects improved ROM coal production at both operating mines, Tarrawonga and Werris Creek, reflecting improved mining conditions

• During H1 FY20 Rocglen and Sunnyside mines ceased operations and transitioned into rehabilitation. Rehabilitation is on schedule at both sites to be largely completed by the end of FY22. Final revegetation activities are being undertaken at Sunnyside while earthworks at Rocglen are scheduled to be completed in 2021

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Guidance
range
3.8-4.1Mt
H2
4.4 4.5 4.5 4.3
3.9 3.8
1.8 H1
FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021
Continuing Operations Rocglen & Sunnyside
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16

Growth opportunities and optionality

Whitehaven has multiple options to grow its business of long life mines

Greenfield Brownfield	Assets	Approved Production1	LOM
	Maules Creek 13Mtpa ROM >35 years • Mine ramping up to 16Mtpa ROM with the roll out of AHS2, commencement of in-pit dumping and 16Mtpa modification application
	Narrabri Stage 3 Extension Project 11Mtpa ROM >25 years • Extends mine life to 2045
	Vickery Extension Project 10Mtpa ROM >20 years • Open pit metallurgical and thermal coal production • On site coal handling preparation plant • Rail from site
	Winchester South Project Seeking ~ 15Mtpa ROM >25 years • Whitehaven’s expansion into the Bowen Basin • Open pit metallurgical and thermal coal production

1 Approved ROM production for operating mines in the table is fully underpinned by the JORC Reserves for those mines. The forecast production from the Vickery project is underpinned by the JORC Reserves released to the ASX on 13 August, 2015 while the forecast production from Winchester South is underpinned by the JORC Resources and Reserves released to the ASX on 16 December, 2020. Whitehaven confirms that the material assumptions underpinning the forecast production in the initial public reports for Vickery and Winchester South continue to apply and have not materially changed. Whitehaven’s JORC information is available at https://whitehavencoal.com.au/investors/jorc/ 2 AHS = Autonomous Haulage System for overburden movement

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17

Financial highlights

Profit and Loss($m)	H1 FY21	H1 FY20	Comment
EBITDA	37.2	177.3	COVID’s impact on coal prices offsets improved operational performance
Net (loss)/profit after tax	(94.5)	27.4
Cash generated from operations	54.9	122.3
Dividends (cps)	-	1.5	Dividend policy 20%-50% of NPAT
Unit cost per tonne ($/t)	70	76	Improved operational performance
Balance Sheet	31 Dec 2020	30 Jun 2020	Comment
			Capital discipline partially offset by coal sales
Net debt ($m)	823.1	787.5	slippages from December into January - refer to slide
			24 for details
Gearing (%)	21%	20%

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18

Profit and Loss

COVID’s im act on coal rices ecli sed im roved o erational erformance p p p p p p

Financial Performance – A$ millions	H1 FY21	H1 FY20
Revenue	699.3	885.1
Other income	1.6	1.4
Operating expenses	(362.9)	(338.6)
Coal purchases	(65.9)	(127.4)
Rail, Port, Marketing and Royalties	(209.4)	(227.9)
Admin and other expenses (including net FX gain/loss)	(25.5)	(15.3)
EBITDA	37.2	177.3
Depreciation & amortisation	(138.2)	(116.1)
Net Interest Expense	(30.5)	(20.3)
Income tax benefit/(expense)	37.0	(13.5)
Net (loss)/profit after tax	(94.5)	27.4
EBITDA Margin on sales of own coal (AUD$ per tonne)	5	24
Earnings per share (cents per share – basic)	(9.5)	2.8

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19

EBITDA vs pcp

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Realised Prices H1 FY21 H1 FY20
$m
Thermal (USD/t) 55 70
200
Metallurgical (USD/t) 75 94
FX H1 FY21 H1 FY20
150
AUD:USD 0.72 0.68
100
177
(197)
(10)
50
48
37
-
18
-50 H1 FY20 Price (net of royalties) Sales Volume Costs Other H1 FY21
and FX
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20

Project STRIVE update

A two year program to embed cost savings into our business

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Initiatives include: Initiatives include:
• •
Improved CHPP recovery Expected cost
productivity at load • Train load out savings
and haul optimization
• Reduction in • Introduction of (per sales of own coal):
equipment damage, short interval 2 year target
• tyresHire equipment monitoring of mine operating systems $10M$19M $50m Year 1: $0.70/t
rationalisation to improve Year 2: $1.50/t
performance Year 3: $2.00/t
$50M
$20M
$20M
Implementing Planning Identification
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# of projects 12 10 24+ 46+

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Drivers of D&A and net interest expense

	H1 FY21	H1 FY20	Drivers
Depreciation & amortisation D&A per tonne (sales of own coal)	$138.2m $17.8/t	$116.1m $17.2/t	• Increase driven by higher ROM production, the new Tarrawonga fleet, renewed lease arrangements and capitalised major rebuilds of the operating fleet • Reflects higher depreciation on fleet major rebuilds
Net interest expense Average balance of drawn senior bank debt facility during period	$30.5m $619m	$20.3m $292m	• Reflects increased drawn balance of the senior bank debt facility and amortisation of refinancing upfront costs - refer to Note 4 of financial statements for a detailed break down

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Financing

Diversified sources of capital

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Senior debt facility

as at 31 December $688.0m drawn

• $1bn syndicated facility

• Facility matures July 2023

• Syndicate comprised of Australian and

• International banks

• BBSW + Margin grid[1]

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ECA[2]

as at 31 December $63.1m

• Average tenor of 8 years

• BBSY + Margin

• Secured

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Leased equipment

as at 31 December

$307.4m

• Tenor - Four or five years

• Provided by syndicate or OEM related

• Pricing can be either floating or fixed rate

• Secured against asset & guaranteed

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Bank guarantees[3]

as at 31 December $446.2m drawn

  - Refinanced at the time of syndicated facility

  - Underpins mining operations and logistics

• IFRS16 ROU leases

• $112.1m included

1 A margin grid is a matrix used to adjust the margin (price) of a loan or revolving credit facility based on financial indebtedness ratio, net-debt to EBITDA 2 ECA facility – Export Credit Agency finance

3 Refer to Note 8 of the Half-year Financial Report.

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Net debt and liquidity

	31 Dec 2020	30 June 2020
	$m	$m
Senior secured bank facility (drawn)	688.0	638.0
ECA1	63.1	68.1
Finance leases	195.3	216.3
Cash on hand	(99.8)	(106.8)
Capitalised borrowing costs	(23.5)	(28.1)
Net debtexcluding IFRS 16 lease liabilities	823.1	787.5
IFRS 16 leases	112.1	130.3
Equity	3,155.8	3,249.6
Gearingexcluding IFRS 16 lease liabilities	21%	20%
Liquidity	411.8	468.8

Available liquidity of $411.8m at 31 Dec 2020

• Undrawn senior debt facility of $312m

• Cash of $99.8m

• Increase of $50m in senior drawn debt driven by

• Deferral of December coal sales into January due to NCIG coal loader outage

• Lease payments

During the half the company sought and received from its finance providers an amendment to one of three covenants, being its Interest Cover Ratio covenant. Subsequent to year end, the company has prepared a Compliance Certificate for delivery to its banking syndicate for the 12 months ended 31 December 2020 which reports compliance with the original unadjusted ICR covenant.

1 ECA facility – Export Credit Agency finance for equipment at Narrabri and Tarrawonga

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24

Investing - capital expenditure

Sustaining PP&E

Growth Projects

$37m

$18m

• •

• Sustaining capex Water security •

• • Maules Creek AHS Land purchases

• • Narrabri mains • Vickery expansion

• • Winchester South

• • Narrabri Stage 3 Extension

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25

WW Working

Guidance for FY21

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FY2021 production, sales & cost guidance

Key Elements		H1 FY21 actual	FY21 updated guidance	FY21 previous guidance	Comments
Managed ROM Coal Production	Mt	9.6	21.0 – 22.5	21.0 – 22.5	Unchanged
Maules Creek	Mt	5.2	11.8 – 12.4	11.8 – 12.4	Unchanged
Narrabri	Mt	2.6	5.4 – 6.0	5.4 – 6.0	Unchanged
Gunnedah Open Cuts	Mt	1.8	3.8 – 4.1	3.8 – 4.1	Unchanged
Managed Coal Sales	Mt	9.5	19.0 – 20.0	19.0 – 20.0	Unchanged
Cost of Coal1	A$/t	70	69 - 72	69 – 72	Unchanged

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1 excluding royalties

27

FY2021 capital expenditure guidance

Key Elements		H1 FY21 actual	FY21 updated guidance	FY21 previous guidance	Comments
Sustaining Capital
	$m	19	35 – 40	30 – 35	Underground and open cut, land
	$m	15	20 – 25	30 – 35	Major rebuilds previously funded in lease refinance
Narrabri Mains Development
	$m	3	3	5	Mains development complete for FY21
Expansion & Growth Capital
Operating Mine Projects	$m	5	~10	15 – 20	Maules Creek AHS project, further Narrabri longwall automation and water infrastructure
Growth Projects	$m	13	~25	35 – 40	Vickery land and project, Winchester South studies and Narrabri Stage 3
Other
Acquisition of EDF consideration	$m	-	17	17	Second of five annual USD11m instalments

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28

Continued Focus CY21

Continue to improve operational performance and discipline driving improved productivity and lower costs

• Improved safety and environmental performance

• Operational focus

• Build on early STRIVE initiatives and embed in operations

• Retire debt

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WW
Working
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Appendices

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Gunnedah Basin and expanding to Bowen Basin Whitehaven is the largest independent producer of high CV coal in Australia

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Winchester South
will increase
Whitehaven’s
metallurgical coal
production
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31

Unit cost calculation

The unit cost can be calculated off the face of the P&L. It includes operating expenses, selling & distribution expenses, administration expenses and share based payment expenses.

Coal purchases, royalties, depreciation & amortisation, FX and significant items are excluded.

	H1 FY21		FY20		H1 FY20		FY19
	$’000	$/t	$’000	$/t	$’000	$/t	$’000	$/t
Operating expenses	362,905	$47	695,621	$49	338,564	$50	734,858	$47
Selling & distribution expenses	160,091	$21	342,084	$24	166,889	$24	324,131	$21
Administrative expenses	18,534	$2	29,810	$2	12,539	$2	26,185	$2
Share based payment expenses	2,428		6,259		2,470		7,684
Less: significant items – operating expenses note 2.2							(40,456)	($3)
Total cost of coal	543,958	$70	1,073,774	$75	520,462	$76	1,052,402	$67
Sales of own coal kt1	7,775		14,278		6,833		15,600

1 FY20 and H1FY20 includes Rocglen’s sales of produced coal of 77kt and excludes Sunnyside’s sales of 232kt

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32