Anglo American plc · LSE:AAL
Anglo American — FY2007 Earnings Presentation
25 slides from Anglo American's earnings presentation, Feb 20, 2008
Slide 1: 2007 Full Year Results
2007 Full Year Results 20 February 2008 This presentation is being made only to and is directed only at (a) persons who have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “O
Slide 2: Agenda
Agenda 2007 Highlights – Cynthia Carroll, CEO Financial Results – René Médori, FD Outlook – Cynthia Carroll, CEO Question & Answer Session 11 2007 Annual Results
Slide 3: 2007 Financial Highlights
2007 Financial Highlights Record financial performance • Increased operating profit, up 12% to $8.9bn from core operations1 • Record operating profit on a total Group basis of $10.1bn • Underlying earnings up 5.3% at $5.8bn • Cost savings at $380m • EPS up 18% at $4.40 Significant cash returned
Slide 4: Safety – a One Anglo priority
Safety – a One Anglo priority Considerable focus across the group • 2 Safety Summits held in 2007 • Safety Risk Management Programme • Anglo’s safety leadership efforts being recognised as leading in the SA mining industry More disciplined and consistent approach • Leadership • Responsibility of l
Slide 5: 2007 Strategic Highlights
2007 Strategic Highlights Completing portfolio repositioning Delivering organic growth in core business segments • Commissioned: Dawson (coal), Sishen (iron ore) • In Progress: – Copper: Collahuasi, Los Bronces – Nickel: Barro Alto – Coal: Lake Lindsay, Cerrejón, Mafube, MAC West – Platinum: PPR
Slide 6: 2007 Financial Highlights
2007 Financial Highlights Group Operating Profit from Core Operations1 ($m) Divisional Operating Profit ($m) +12% 8,894 4,338 7,974 3,897 Core Non-Core Operations Operations 2,697 2,398 1,210 763 862 614 463 484 474 317 2006 2007 Base Metals Platinum Ferrous Coal Diamonds Industrial Metals2 Minerals
Slide 7: Base Metals
Base Metals Record performance driven by the strong nickel price and production gains in copper & zinc Barro Alto nickel project ($1.5bn) progressing on schedule Los Bronces expansion project ($1.7bn) approved and commenced, increasing to an Operating Profit ($m) initial production level excee
Slide 8: Platinum
Platinum Record profits despite decline in platinum volumes (-12%) from shortage of skilled labour and temporary shaft closures to improve safety Actions in 2007 have reset the business for future profitable growth Major BEE transactions announced Operating Profit ($m) PPRust North and Amand
Slide 9: Ferrous Metals and Industries
Ferrous Metals and Industries Record performance due to higher iron ore prices and volumes. Iron ore contribution up 48% to $834m Sishen expansion project (+13 mtpa) started production Q4 2007 Major investments for near-term growth: • Acquired 49% of Minas-Rio project in July Operating Profit
Slide 10: Coal
Coal Operating profit lower versus prior year due to stronger AUD, lower Australian coking coal prices and logistical challenges Countermeasures implemented to improve 2008 performance in Australia Mafube and Lake Lindsay ramping up to full Operating Profit ($m) production in 2008; $505m Zonda
Slide 11: Diamonds
Diamonds Operating profit increase of 4.5% due to modest rise in diamond prices Impairment of Canadian assets of $965m (100%) made due to increase in Canadian dollar, fuel, labour and capital costs Snap Lake commenced production in Operating Profit ($m) October 2007 with full production expect
Slide 12: Summary of Highlights
Summary of Highlights Record financial performance driven by robust pricing and production gains ‘One Anglo’ approach taking hold Organic development projects being expedited New growth options created Strong cash flow and balance sheet to support future, value-enhancing investments 1111 2
Slide 13: Financial Results
Financial Results René Médori This presentation is being made only to and is directed only at (a) persons who have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or
Slide 14: Financial Performance
Financial Performance Underlying EPS ($) 2007 $bn 2007 2006 change 2006 4.40 (+18%) 3.73 Operating profit – core 8.9 8.0 +12% operations1 2.18 2.22 2.03 Operating profit – total 10.1 9.8 +3% Group basis 1.70 Effective tax rate (%) 31.8 32.7 Underlying earnings 5.8 5.5 +5% H1 2006 H2 2006 H1 2007 H2
Slide 15: Operating profit variances
Operating profit1 variances $ million 1,867 14 75 192 11 (396) (747) (96) 8,894 7,974 2006 Price Exchange Volume Inflation Cash Non-cash Associates Other 2007 Costs costs 1Stated for core operations: Base Metals, Platinum, Coal, Diamonds, Ferrous Metals (Kumba Iron Ore, Scaw Metals, Samancor, Minas-
Slide 16: Operating profit variances: Price
Operating profit1 variances: Price Commodity price performance (indexed) 400 350 $ million Nickel 300 2007: 1,686c/Ib 1,867 2006: 1,095c/lb 250 Copper 2007: 323c/Ib 200 2006: 305c/lb Platinum 150 2007: $1,304/oz 2006: $1,142/oz 100 Jan 06 Dec 07 7,974 $ million Price variance breakdown 2,500 2,000 2
Slide 17: Operating profit variances: FX, Volume and Cost
Operating profit1 variances: FX, Volume and Cost 4% Production change 07/06 2% Platinum equivalent Platinum 1% $ million refined production 6.3% lower than 20062 (refined) 1,867 Coal Copper Iron ore 14 75 (396) (747) +7.5% increase - Includes cost savings of $183m3 7,974 -12% Op. profit 2007 2006 Im
Slide 18: Gearing increased to 20%
Gearing increased to 20% Capex ($ million) 3,538 $bn Gearing 397 Opening net debt 1 3.3 12.9% January 2007 610 2,399 Operating cashflows (9.8) 379 Capital Expenditure 4.1 1,408 315 1,479 Cash tax paid 2.9 190 923 Asset disposals (5.2) Ferrous Metals 271 Base Metals Acquisitions 1.9 616 Platinum 782
Slide 19: Outlook
Outlook Cynthia Carroll This presentation is being made only to and is directed only at (a) persons who have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (b) hi
Slide 20: Building from a position of strength
Building from a position of strength 1. Uplifting the existing, unique portfolio 2. Expediting projects for significant near and medium term growth 3. Creating new growth options through targeted acquisitions 19 19 2007 Annual Results
Slide 21: 1. Uplifting the Existing Unique Portfolio
1. Uplifting the Existing Unique Portfolio Realising the Benefits of “One Anglo” Procurement and Shared Services initial savings of $1bn targeted • Appointed new head of Procurement • Setting up three shared service centres: South Africa, Australia and Latin America • Restructuring finance sub-fun
Slide 22: 2. Expediting Projects for Growth
2. Expediting Projects for Growth 2008/9/10 Increase Projects / Initiatives Production* from 2007 • Collahuasi highgrading 22 ktpa • Collahuasi debottlenecking 13.2 ktpa +5% • Sishen Expansion Project 13 mtpa +54%1 • Dawson and Lake Lindsay 5.6 mtpa +48%2 • Mafube, Cerrejón, Mac West 13.0 mtpa +13%3
Slide 23: 3. Creating New Growth Options
3. Creating New Growth Options Over $40bn Pipeline, Doubled from Last Year 2010 / 2011 2012 / 2013 2014 and Beyond Los Collahuasi Quellaveco Bronces Expan. 2 Minas-Rio Pebble Zondags- fontein Minas-Rio Phase I expansion Jacaré Amandel- Lebowa Barro bult Michiquillay Sishen Alto Sishen Expan. 2 Sishe
Slide 24: Building from a position of strength
Building from a position of strength 1. Uplifting the existing, unique portfolio 2. Expediting projects for significant near and medium term growth 3. Creating new growth options through targeted acquisitions 23 23 2007 Annual Results
Slide 25: Questions and Answers
Questions and Answers This presentation is being made only to and is directed only at (a) persons who have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (b) high