Rio Tinto Plc · LSE:RIO
Rio Tinto — Bank of America Merrill Lynch 2018 Global Metals, Mining & Steel Conference
15 slides from Rio Tinto's conference presentation, May 16, 2018
Slide 1: Notice to ASX
For personal use only Notice to ASX Bank of America Merrill Lynch Metals & Mining Conference 15 May 2018 Rio Tinto chief executive J-S Jacques is presenting today at the Bank of America Merrill Lynch Metals & Mining Conference in Miami, Florida. The presentation is attached and will also be availabl
Slide 2: Delivering superior returns
For personal use only Delivering superior returns J-S Jacques, chief executive 2018 Global Metals, Mining & Steel Conference Bank of America Merrill Lynch, 15 May 2018
Slide 3: Cautionary statements
2 Cautionary statements For personal use only This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (“Rio Tinto”). By accessing/attending this presentation you acknowledge that you have read and understood the following statement. Forward-looking statements This document, includ
Slide 4: Continuing to deliver superior returns
3 Continuing to deliver superior returns For personal use only EBITDA of $18.6 billion, margin of 44% in 2017 Reshaping the portfolio with divestment proceeds of $2.7 billion in 2017 - Further divestments of ~$5 billion announced to date in 2018 Investing in high-return growth: $2.5 billion in
Slide 5: Delivered ~50% of sector cash returns in 2017
4 Delivered ~50% of sector cash returns in 2017 For personal use only 2017 cash returns across the diversified miners4 Allocation of cash generated2 – 2017 US$bn Peer average3 <$8bn of total cash returns from peers 16% 1 49% 8.2 44% 4.4 23% 19% 16% 1.5 21% 1.0 0.6 12% Rio Tinto Peer 1 Peer 2 Peer 3
Slide 6: Supportive global macro, but with inflation and volatility
5 Supportive global macro, but with inflation and volatility For personal use only PMIs remain elevated 65 60 55 50 45 US Eurozone China Japan 40 2016 Jan 2016 Jul 2017 Jan 2017 Jul 2018 Jan Increased volatility 40 30 20 10 0 2016 Jan 2016 Jul 2017 Jan 2017 Jul 2018 Jan CBOE Market Volatility Index
Slide 7: Safety and health come first
6 Safety and health come first For personal use only Fatality at Iron & Titanium in April 2018 Continuing history of improvement in AIFR Focusing on fatality elimination in part through the Critical Rio Tinto ICMM (23 companies) Risk Management programme which continues across the 1.56 Group Reducin
Slide 8: Building strength across the business
7 Building strength across the business For personal use only Resilient group EBITDA margins… … with ROCE1 that continues to outperform its peers 2 5 year average 2017 17% 13% 11% 8% Peer average3 Peer average3 4 5 5 Source: Rio Tinto, Company filings, Bloomberg, Metals Bulletin 1 Defined as tax adj
Slide 9: Further value creation
8 Further value creation For personal use only Delivering mine-to-market Investing in Tier 1 organic growth Active portfolio management productivity $1.5bn additional free cash 2% annual CuEq ~$11bn divestments1 flow per year from 2021 growth over next 5 years Disciplined acquisition strategy 1 Dive
Slide 10: A clearly defined productivity programme
9 A clearly defined productivity programme For personal use only $1.5bn productivity opportunity in 2021 Productivity levers ($5bn cumulative, 2017-2021) Impact of productivity programme on ROCE1 20% Best practice 17% Partnering 11% with our suppliers Data & technology 3 Iron Ore 2017A 2017A 2017PF
Slide 11: High-return growth optionality
10 High-return growth optionality For personal use only Iron Ore Aluminium Copper Industrial Minerals Optimising the world’s premier iron Building optionality into the lowest Building the largest and highest Extensive exploration programme ore business cost bauxite and aluminium business quality cop
Slide 12: Tier 1 growth within our world-class portfolio
11 Tier 1 growth within our world-class portfolio For personal use only 2025 iron ore cost curve 2025 aluminium cost curve Grande Baie Kitimat Laterrière Alma Koodaideri 2030 copper cost curve 2025 bauxite cost curve Resolution Oyu Tolgoi Amrun Source: Rio Tinto (bauxite), Wood Mackenzie (all others
Slide 13: Capital rotation is positioning Rio Tinto for the future
12 Capital rotation is positioning Rio Tinto for the future For personal use only Continuous portfolio review c.$11bn of disposals – Focusing on higher long-term returns Cost curve position, scale and expandability announced since 2014 Core – Successful divestment programme portfolio – Exiting coal
Slide 14: A disciplined capital allocation framework
13 A disciplined capital allocation framework For personal use only Superior cash generation World-class assets Operating excellence Capabilities Portfolio Performance People & Partners Disciplined capital allocation Balance sheet strength Superior shareholder returns Compelling growth ©2018, Rio Ti
Slide 15: Unrivalled platform for superior value creation
14 Unrivalled platform for superior value creation For personal use only Delivering mine-to-market Investing in Tier 1 organic growth Active portfolio management productivity $1.5bn additional free cash 2% annual CuEq ~$11bn divestments1 flow per year from 2021 growth over next 5 years Disciplined a
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