Anglo American Plc · LSE:AAL
Anglo American — Bernstein Strategic Decisions Conference 2018
20 slides from Anglo American's conference presentation, Sep 26, 2018
Slide 1: Bernstein Strategic Decisions Conference
BERNSTEIN STRATEGIC DECISIONS CONFERENCE 26 September 2018 Copper – Quellaveco
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT Disclaimer: This presentation has been prepared by Anglo American plc (“Anglo American”) and comprises the written materials/slides for a presentation concerning Anglo American. By attending this presentation and/or reviewing the slides you agree to be bound by the following con
Slide 3: What You Should Take Away…
WHAT YOU SHOULD TAKE AWAY… A transformed business Continuing delivery Disciplined growth Portfolio strength 3
Slide 4: Asset Quality – Differentiated Portfolio
ASSET QUALITY – DIFFERENTIATED PORTFOLIO Revenue by product1 Capital employed by geography1 Nickel and Manganese Other 7% 4% PGMs Australia Thermal coal 18% 8% 14% Brazil 25% Diamonds Met coal (De Beers) 17% 22% Chile, Peru & Colombia Iron ore 19% South Africa 9% Copper 26% Namibia & 14% Botswana 18
Slide 5: An Improved Competitive Position
AN IMPROVED COMPETITIVE POSITION Group: Group: 46th percentile 52nd percentile 2018 2013 2018 2013 Copper 2018 2013 Met Coal 2018 2014 Diamonds (De Beers) 2018 2013 PGMs 2018 Nickel 2013 2013 2018 Thermal Coal 2013 2018 Iron Ore Cost curve position Q1 Q2 Q3 Q4 5
Slide 6: H1 2018 – Continued Delivery
H1 2018 – CONTINUED DELIVERY Operating performance Earnings and cash flow Margins and returns Production volumes2 EBITDA4 EBITDA margin6 6% $4.6bn 41% Cost & volume improvements3 Attributable free cash flow5 ROCE7 $0.4bn $1.6bn 19% 6
Slide 7: A Resilient Balance Sheet
A RESILIENT BALANCE SHEET Net debt8 ($bn) Net debt / EBITDA Gearing ratio9 36% y-o-y 42% y-o-y 37% y-o-y 6.2 0.8x 19% 4.5 13% 4.0 0.5x 12% 0.4x H1 2017 FY 2017 H1 2018 H1 2017 FY 2017 H1 2018 H1 2017 FY 2017 H1 2018 (annualised) (annualised) 7
Slide 8: Deleveraging and Dividend Sustainability
DELEVERAGING AND DIVIDEND SUSTAINABILITY Capital allocation framework10 H1 2018 • Attributable free cash flow of $1.6bn 1.8 • Add back discretionary spend Cash flow Discretionary after capital sustaining options capital • Reduced net debt by $0.5bn • Paid final dividend of $0.7bn (1.7) • Other adjus
Slide 9: Disciplined Growth
DISCIPLINED GROWTH Copper - Quellaveco
Slide 10: Portfolio – Asset Quality Focus
PORTFOLIO – ASSET QUALITY FOCUS Longer term positioning Quality asset focus Exceptional resource endowment High quality growth opportunities Copper Long life, low cost assets Los Bronces, Collahuasi & Quellaveco Discretionary Capital Diamonds Industry leader with diversification Capacity to respond
Slide 11: $4.6bn Cost & Volume Improvement Delivered
$4.6BN COST & VOLUME IMPROVEMENT DELIVERED …the next $3-4bn Operational Efficiency Technology and Innovation Project Delivery ~$1.5bn ~$1.0bn ~$1.5bn 1-5 years 3-5 years 3-5 years Benchmark and beyond Concentrated Mine Quellaveco (Copper) Amandelbult turnaround (PGMs) Digitally Intelligent Mine Mora
Slide 12: Quellaveco – A World Class Copper Project
QUELLAVECO – A WORLD CLASS COPPER PROJECT Attractive returns… …for a world class copper project IRR Low cost Q1 on cost curve >15% Long life Real, post-tax Significant Large scale potential ROCE Endowment upside >20% Capital Average over first 10 years Successful syndication discipline Permitted Pay
Slide 13: Execution Ready
EXECUTION READY Strong local support, key permits in place Target construction schedule of <4 years Community support Land access 26 Dialogue Table commitments ~$300m • Secured 100% of land access for mine / plant • All 5 family relocations successfully completed Community investment River diversion
Slide 14: High Quality Brownfield Growth Optionality
HIGH QUALITY BROWNFIELD GROWTH OPTIONALITY Near term low cost growth potential Moranbah Grosvenor (Met Coal) >40% IRR ~25% increase in plant capacity Capital of ~$200m Marine Namibia vessel (De Beers) <3yrs payback ~0.5Mct per annum production Capital of ~$200m (Anglo share) 14
Slide 15: Asset Focused Strategy
ASSET FOCUSED STRATEGY Copper – Los Bronces
Slide 16: Portfolio: Long Life with Optionality
PORTFOLIO: LONG LIFE WITH OPTIONALITY A unique endowment Longer term asset optionality 2017 average asset life13 Los Bronces UG, Collahuasi Copper 30 years & Sakatti Diamonds Jwaneng, Orapa (De Beers) & Marine Namibia Average life13 (years) Mogalakwena, Amandelbult PGMs & Mototolo 30 30 Aquila, Mora
Slide 17: Prospective Districts in Diversified Geographies
PROSPECTIVE DISTRICTS IN DIVERSIFIED GEOGRAPHIES Australia Cu Sakatti Mt Isa South, >7,000km2 under application Peregrine Brazil Cu-Au Uniao Uniao, >19,000km2 under application, Ecuador Zambezi West Corcapunta Quellaveco Los Bronces Mogalakwena Ecuador Cu-Au Mt Isa South Securing prime position, >80
Slide 18: Portfolio Positioned for a Changing World
PORTFOLIO POSITIONED FOR A CHANGING WORLD An Electrified A Greener A Richer World World World ~1Mt copper ✓ ✓ ✓ ~37Mct diamonds (De Beers) ✓ ~5Moz PGMs ✓ ✓ ~70Mt high grade iron ore ✓ ~21Mt premium coking coal ✓ ~30Mt export thermal coal ✓ ✓ ~75kt nickel and ~3.5Mt manganese ✓ ✓ 18
Slide 19: Potential Turned into Delivery
POTENTIAL TURNED INTO DELIVERY Assets Capabilities Returns Quality Operating Model Strong balance sheet Diversification Innovation and Capital discipline sustainability Growth Marketing Sustainable dividend “World class assets & leading capabilities to deliver a world class business” 19
Slide 20: Footnotes
FOOTNOTES 1. Attributable basis. Revenue by product based on business unit. 2. Copper equivalent production is normalised for Bokoni being placed on care and maintenance, and the suspension of operations at Minas-Rio. 3. EBITDA variance. Volume variance calculated as increase/(decrease) in sales vol
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