Glencore Plc · LSE:GLEN
Glencore — H1 2021 Earnings Presentation
31 slides from Glencore's earnings presentation, Aug 5, 2021
Slide 1: 2021 Half-year Results
2021 Half-year Results Our purpose Responsibly sourcing the commodities that advance everyday life
Slide 2: Important Notice Concerning This Document Including Forward Looking Statements
IMPORTANT NOTICE CONCERNING THIS DOCUMENT INCLUDING FORWARD LOOKING STATEMENTS This document contains, or incorporates by reference, statements that are, or may be deemed to be, “forward-looking statements”, which are prospective in nature. These forward-looking statements may be identified by the f
Slide 3: Highlights
HIGHLIGHTS Gary Nagle Chief Executive Officer
Slide 4: First-half scorecard
HIGHLIGHTS First-half scorecard Financial ($bn) Industrial Marketing 8.7 +79% 5.4 +189% • Strong EBITDA margin uplift: 38% vs 22% H1 2020 • Strong trading performances across all key commodity Adj.EBITDA(1) Equity FCF(2) departments • Continued focus on 6.6 +152% 10.6 -33% value over volume • Favour
Slide 5: ESG scorecard
HIGHLIGHTS ESG scorecard Environment Social Governance Sector leading approach to SafeWork relaunched in H1 2021 Launch of newly refreshed climate change to address underlying issues in Code of Conduct - reflecting our historical safety performance Purpose and Values Commitment to more aggressive to
Slide 6: Performance
2021 FIRST-HALF PERFORMANCE Steven Kalmin Chief Financial Officer
Slide 7: Financial scorecard
2021 FIRST-HALF PERFORMANCE Financial scorecard $bn H1 2021 H1 2020 Chg Adj. EBITDA(1) 8.7 4.8 +79% Industrial 6.6 2.6 +152% Adj. EBITDA Marketing 1.8 2.0 -11% Adj. EBIT Net Income 1.3 -2.6 n.m. Net Income 3.2 0.8 +289% pre-sig. items Funds from 7.3 3.7 +98% Operations Equity 5.4 1.9 +189% Free Cash
Slide 8: Industrial: H1 Adjusted EBITDA $6.6bn
2021 FIRST-HALF PERFORMANCE Industrial: H1 Adjusted EBITDA $6.6bn Industrial Assets EBITDA mining margins • Adjusted EBITDA up 152% to $6.6bn H1 H1 • Underpinned by significantly higher commodity Segmental Adj. EBITDA 21 20 prices Copper 53% 32% • Somewhat offset by modest cost inflation and Zinc 37
Slide 9: Industrial: Adjusted EBITDA bridge
2021 FIRST-HALF PERFORMANCE Industrial: Adjusted EBITDA bridge - 60 + 388 - 580 - 118 Price: +$4.4bn • Stronger year-on-year commodity prices: > Copper: +65%, Newcastle coal: +60%, Silver: 59%, Zinc: +38%, Nickel: +40%, Cobalt: +38%, Ferrochrome: +39% + 4,361 Volume: +$0.4bn • Includes recovery from
Slide 10: Industrial: copper
2021 FIRST-HALF PERFORMANCE Industrial: copper Strong copper performance, Own source production (kt) aided by sustainable ramp-up H1 y/y H1 2021 of Katanga Operating 2021 Chg 2020 Guidance 1454 • Production +2%, mainly Production (kt) 598.0 2% 588.1 1,220 ± 30 1371 1310 reflecting higher Antamina vs
Slide 11: Industrial: zinc
2021 FIRST-HALF PERFORMANCE Industrial: zinc Improved performance Own source production (kt) supported by higher H1 y/y H1 2021 production and by-product Operating 2021 Chg 2020 Guidance 1170 1170 pricing Production (kt) 581.8 6% 550.1 1,170 ± 30 1090 1078 • Production +6%, mainly Mine cash 1068 -17
Slide 12: Industrial: nickel
2021 FIRST-HALF PERFORMANCE Industrial: nickel Weaker production more Own source production (kt) than offset by higher nickel H1 y/y H1 2021 and by-product prices Operating 2021 Chg 2020 Guidance 124 121 110 Production (kt) 47.7 -14% 55.2 105 ± 5 109 105 • Production 14% lower, mainly reflecting the
Slide 13: Industrial: coal
2021 FIRST-HALF PERFORMANCE Industrial: coal H1 y/y H1 2021 Net benefit of higher coal Operating 2021 Chg 2020 Guidance Own source production (kt) prices (coking was down Production (Mt) 48.8 -16% 58.1 104 ± 4 period over period) mostly Thermal FOB 140 offset by lower production 53.5 22% 46.2 54.9 c
Slide 14: Marketing: H1 Adjusted EBIT $1.8bn
2021 FIRST-HALF PERFORMANCE Marketing: H1 Adjusted EBIT $1.8bn Marketing Adjusted Marketing divisions EBIT ($ billion) Adjusted EBIT ($ billion) H1 2021 Adjusted EBIT of $1.8 billion, down 11% y/y 2.0 $2.1bn • Strong performance from all key commodity $1.8bn Metals Energy teams, in line with favoura
Slide 15: Capital allocation: Business reinvestment
2021 FIRST-HALF PERFORMANCE Capital allocation: Business reinvestment H1 2021 Net purchase and sale of property, plant and Key expansionary capital projects: 2021-23 equipment • Copper: Collahuasi desalination plant • $1.8bn net capex cash outflow, +4% y/y • Zinc: Zhairem, Dolinnoe-Obruchevskoye • P
Slide 16: Capital allocation: Balance sheet
2021 FIRST-HALF PERFORMANCE Capital allocation: Balance sheet $bn H1 2021 H1 2020 Chg H1 2021 Net debt $10.6bn ($9.6bn ex marketing leases). Leverage now repositioned around the Net funding 31.9 35.4 -10% lower end of our $10-$16bn target range(1) Net debt 10.6 15.8 -33% Targeting maintenance of con
Slide 17: Capital allocation: 2021 Shareholder returns
2021 FIRST-HALF PERFORMANCE Capital allocation: 2021 Shareholder returns Additional top-up shareholder returns of Distribution policy $1.2bn (c.$0.09/share) Determine and announce base distribution, based on prior year cash flows, for payment in the current year in two installments (May and Septembe
Slide 18: Guidance
2021 GUIDANCE
Slide 19: Production guidance
2021 GUIDANCE Production(1) Copper (kt) Zinc (kt) Cobalt (kt) H2 weighting for ramp-up of 622 588 Katanga’s 51% 50% 20.2 cobalt circuit 58% 1220 1170 35 ± 30 ± 30 ±3 598 582 49% 50% 14.8 42% 2021F H1 2021A H2 2021F 2021F H1 2021A H2 2021F 2021F H1 2021A H2 2021F Nickel (kt) Ferrochrome (kt) Coal (Mt
Slide 20: Mine unit cash costs/margins
2021 GUIDANCE Mine unit cash costs/margins(1) Copper(2) Zinc Nickel Coal $/lb total cash cost $/lb total cash cost $/lb total cash cost $/t Thermal FOB cash cost 0.80 -0.13 4.13 54.9 0.28c/lb ex Au 2.77/lb ex Koniambo 2020A: $0.94/lb 2020A: -$0.07/lb; $0.38/lb ex Au 2020A: $3.76/lb 2020A: $45.9/t •
Slide 21: Illustrative spot annualised cashflows
2021 GUIDANCE Illustrative spot annualised cashflows(1) Copper Adj.EBITDA Group Adj.EBITDA $8.6bn 1.118Mt Cu @ $3.53/lb margin $21.8 Zinc Adj.EBITDA $2.8bn 863kt Zn @ $1.50/lb margin bn Nickel Adj.EBITDA $1.1bn 105kt Ni @ $4.73/lb margin Illustrative spot FCF Coal Adj.EBITDA $11.5 $5.9bn 104Mt Coal
Slide 22: Uniquely Positioned
GLENCORE BE NI@OEIEY POS MONE
Slide 23: Responsibly sourcing the resource needs of the future
UNIQUELY POSITIONED Responsibly sourcing the resource needs of the future The right strategy The right business model • Sector leading climate ambition • Responsive and flexible business to be a net-zero total emissions model that adapts to the themes of company by 2050 the future and customers’ nee
Slide 24: Appendix
APPENDIX
Slide 25: 2021 H1 costs/margin reconciliation
APPENDIX 2021 H1 costs/margin reconciliation Copper Nickel EBITDA($)(1) Total copper production (kt) 598 EBITDA($)(1) Production (kt) 47.7 3.9bn 0.4bn Cu from other depts (kt) -42.9 Realised Ni Price (c/lb) 792 Net relevant production (kt) 555.1 Total mine cash cost (c/lb) -426 Net relevant sales (k
Slide 26: Illustrative spot annualised FCF
APPENDIX Illustrative spot annualised FCF Group $bn Cu (5) Zn (6) Total copper production (kt) 1220 Total zinc production (kt) 1170 Copper 8.6 Cu from other depts (kt) -102 Zn from Cu dept (kt) -153 Net production (kt) 1118 Payability deduction (kt) -154 Nickel 1.1 Forecast sales (kt) 1118 Net produ
Slide 27: Footnotes
APPENDIX Footnotes Slide 26: Totals may not add due to rounding. (1) Other industrial EBITDA includes Ferroalloys, Oil and Aluminium less c.$400M corporate SG&A. (2) Marketing Adjusted EBITDA of $3.0bn is calculated from the mid-point of the $2.2-$3.2bn EBIT guidance range plus $300M of Marketing D+
Slide 28: Key sustainability performance indicators
APPENDIX Key sustainability performance indicators(1) Performance Topic indicator Target H1 2021 H1 2020 Trend Health and safety Fatalities No fatalities 1 2 LTIFR 0.84 0.90 TRIFR 2.52 2.67 Occupational Year-on-year reduction in the number of new occupational disease 53 61 diseases cases Env
Slide 29: Distribution timetable
APPENDIX Distribution timetable $0.06 per share second tranche of base distribution + H2 2021 $0.04 per share special distribution (total of $0.10 per share) Applicable exchange rate reference date (Johannesburg Stock Exchange (JSE) 27 August Applicable exchange rate announced on the JSE 30 August L
Slide 30: Listed entity market valuations and other
APPENDIX Listed entity market valuations and other Listed entities(1) % owned Market value $M Russneft 25.0% 155 EN+ 10.6% 698 Volcan 23.3% 324 Rosneft 0.6% 449 Century 47.4% 622 Yancoal 6.8% 134 Other(2) Various 221 Total 2604 Selection of other entities US oil infrastructure BaseCore (50% owned ro
Slide 31: Additional resources
APPENDIX Additional resources Financial Production reporting Sustainability H1 2021 2020 2020 2020 production Preliminary Sustainability Payments to report results report governments 1Q 2021 2020 2020 2020 Modern production Results Climate slavery report Presentation report statement URLs embedded i