Anglo American Plc · LSE:AAL
Anglo American — Investor Presentation (May 2024)
44 slides from Anglo American's investor presentation, May 14, 2024
Slide 1: Accelerating value delivery
Accelerating value delivery 14 May 2024
Slide 2: Cautionary statement
Cautionary statement Disclaimer: This document has been prepared by Anglo American plc (“Anglo American”) and comprises the written materials/slides for a or other types of regulation in the countries where Anglo American operates, conflicts over land and resource ownership rights and such other pre
Slide 3: Cautionary statement (continued)
Cautionary statement (continued) Quantified financial benefits statements Except as expressly stated, nothing in this presentation constitutes a quantified financial benefits statement for the purposes of Rule 28 of the City Code. The statements which are labelled as containing a quantified financia
Slide 4: Accelerating the delivery of our strategy
Accelerating the delivery of our strategy Operational excellence Portfolio simplification 1 Reset mine plans 2 Focus on copper, & organisation design premium iron ore & crop nutrients Growth 3 Outstanding growth potential in every commodity vertical Creating a leading, future-enabling diversified mi
Slide 5: A compelling value proposition for our shareholders
A compelling value proposition for our shareholders ✓ Portfolio & structure transformation 3 products >50% copper 100% -enabling future 1 Copper Minas-Rio ✓ Outstanding organic growth >1Mtpa potential ~2x production 2 potential 3 ✓ High quality financial profile 31% 4 46% EBITDA margin 4 Efficiency
Slide 6: Clear design principles to define future portfolio
Clear design principles to define future portfolio Absolute & relative asset quality Best assets and industry attractiveness Capabilities, efficiency & funding capacity Portfolio synergies to deliver full potential of each asset Shareholder value recognition, Optimal value delivery cost of change &
Slide 7: Unlocking value from Anglo American Platinum
Unlocking value from Anglo American Platinum Leading PGMs position with opportunity from Best assets asset improvement & market dynamics Standalone business able to set its priorities Portfolio synergies to deliver its full potential Scale & differentiation of PGM business means Optimal value delive
Slide 8: A simplified portfolio daylights value of world class assets
A simplified portfolio daylights value of world class assets in future-enabling products Copper Copper Quellaveco Los Bronces 54% Collahuasi Sakatti Premium iron ore Current cu eq production6 2030F6 Minas-Rio Kumba Serpentina 46% Crop nutrients High quality Woodsmith iron ore Anglo American 8
Slide 9: Material improvement in metrics while maintaining diversification
Material improvement in metrics while maintaining diversification Diversification7 EBITDA margin8 46% 31% South Africa Chile 25% 28% Now New Lower costs5 Brazil Peru 26% 20% $1.7bn Fundamental reset of a Copper Premium iron ore more focused business Anglo American 9
Slide 10: Anglo American shareholders to capture full value from portfolio changes
Anglo American shareholders to capture full value from portfolio changes Portfolio transformation to be delivered at pace, while safeguarding shareholder value Steelmaking Nickel De Beers PGMs coal C&M or potential Demerger Divestment Divestment divestment or demerger Anglo American 10
Slide 11: Proven capabilities to deliver sustainable value & growth
Proven capabilities to deliver sustainable value & growth Technology Sustainability Delivering profitable & sustainable outcomes Quellaveco Woodsmith Sakatti Anglo American 11
Slide 12: Copper
AngloAmerican
Slide 13: A leading global copper business
A leading global copper business 1 Global copper business with world class assets 2 Defined pathway to achieving >1Mtpa of copper by early 2030s9 3 Outstanding copper endowments underpinning growth & multi-decade production 4 Proven project, technical & sustainability capabilities to deliver growth
Slide 14: A proven portfolio with well-defined growth potential
A proven portfolio with well-defined growth potential Significant planned 1st quartile 3 of the industry’s production uplift cost position largest copper mines Production (kt) 2024F C1 cash costs10 Top 10 South American copper mines 100% basis +32% US$/t By production11 ~1,000 Escondida +19% Collahu
Slide 15: Three world-class mines in South America
Three world-class mines in South America Collahuasi Quellaveco Los Bronces (44% ownership) (60% ownership) (50.1% ownership) 2023 production 25212 31913 21513 (kt Cu) Reserve life14,15 74 35 33 Reserves (Mt)15 32.8 @ 0.80% TCu 8.2 @ 0.51% TCu 7.7 @ 0.40% TCu C1 cash cost 1.10 0.76 2.27 ($/lb paid me
Slide 16: Quellaveco: Highly prospective copper near-asset Exploration Targets
Quellaveco: Highly prospective copper near-asset Exploration Targets1,2,3 enabling multi-decade production growth Quellaveco cross section Quellaveco district Estimated in-situ A A’ Exploration Target Low High 2023 Reserve4 pit 8.2Mt Cu metal Billion tonnes 5 11 Cu% 0.4 0.6 2023 Resource4 pit 7.6Mt
Slide 17: Anglo American has both valuable copper growth options & capabilities needed to deliver them
Anglo American has both valuable copper growth options & capabilities needed to deliver them ...in addition to being constrained by Copper growth is becoming more expensive... sustainability considerations Industry capital intensity, $’000/tpa Cu17 Undeveloped copper resources (Mt)18 176 20 +56% 74
Slide 18: Pathway to >1Mtpa of copper production
Pathway to >1Mtpa of copper production: well-sequenced growth options supporting multi-decade production Track record of Collahuasi 9 delivering +19% expansion 50-100 ~1Mt ~100 production growth ~20 ~760 19 ~150 ~25 638 Further expansion potential at Quellaveco being evaluated 2019 2024F Debottlenec
Slide 19: Premium iron ore
&S AngloAmerican Premium iron ore
Slide 20: A premium iron ore opportunity
A premium iron ore opportunity 1 Strong premium iron ore market fundamentals: growth & premia upside 2 Right product mix: substantially higher exposure to premium iron ore vs peers Extensive resource potential: Serpentina provides a high value option to potentially double 3 DRI-grade iron ore produc
Slide 21: Strong DRI-grade iron ore market fundamentals
Strong DRI-grade iron ore market fundamentals Significantly higher premiums for Higher growth in DRI-grade iron ore demand DRI-grade iron ore 2023-2040 demand CAGR21 Premium per 1% Fe above 65%, $/dmt22 Blast furnace iron ore DRI-grade iron ore Essential for 20 higher value 6.5% 5.2% green steel 2.9
Slide 22: Anglo American has focused exposure to premium iron ore
Anglo American has focused exposure to premium iron ore Anglo American’s products are supporting Recent Minas-Rio deal grants access to the steel industry decarbonisation large scale, high quality Serpentina resource… High grade (>63% Fe) as % of production mix23 100% 4.3Bt current Mineral Resource2
Slide 23: Woodsmith
&S AngloAmerican Woodsmith
Slide 24: Tier 1 asset positioned for the future
Tier 1 asset positioned for the future Demand Future-enabling Large-scale Highly cash vs supply gap product Long-life generative More food from less Multi-nutrient, organic, 13Mtpa, >50% EBITDA arable land lower carbon fertiliser >40yr25 margin26 Anglo American 24
Slide 25: Setting Woodsmith up for success
Setting Woodsmith up for success Tier 1 growth asset with multi-generational resource scale Complete feasibility study in H1 2025 FID27 dependent on portfolio transformation, balance sheet & syndication Anglo American 25
Slide 26: Financials
&S AngloAmerican Financials John Heasley
Slide 27: Higher margin business with strong cash conversion
Higher margin business with strong cash conversion 2023 pro-forma financials28 Revenue $16.5bn Operating free cash flow $4.7bn EBITDA $7.5bn Capex $2.7bn EBITDA margin29 46% Cash conversion30 78% +15pp vs current business +24pp ROCE 25% Inventory days 53 days +9pp -43 days Anglo American 27
Slide 28: Strong improvement in 5 year historical average performance
Strong improvement in 5 year historical average performance 2019-2023 average pro-forma financials31 EBITDA margin Inventory days Cash conversion ROCE 46% 99 88% 31% 78% 37% 25% 50 Reported Pro-forma Reported Pro-forma Reported Pro-forma Reported Pro-forma Higher margin ✓ Highly cash generat
Slide 29: Total cost savings $1.7bn; $0.8bn incremental to previous commitment
Total cost savings $1.7bn; $0.8bn incremental to previous commitment Sustainable unit Targeted savings $1.7bn of cost-out cost benefits Right-sizing support functions from third party programmes; Run rate delivered from the driven by spend, investment $0.9bn announced operational & delivering the ta
Slide 30: Significantly lower capex profile
Significantly lower capex profile Pro-forma existing capex guidance Woodsmith capital re-phasing adjusted for Woodsmith ~5.733 Previously ~5.734 33 ~0.9 ~4.9 Previously ~5.334 33 ~4.3 Previously ~1.0 ~0.2 35 Previously ~1.0 ~0.0 2024F 2025F 2026F 2024F 2025F 2026F Retained Carved out Capex guidance
Slide 31: Significantly lower & more stable working capital profile
Significantly lower & more stable working capital profile Pro-forma working capital cashflow profile Pro-forma inventory profile Inventory ($m) 1.0 1.4 1.5 (0.2) 2021 2022 2023 (0.5) (0.7) Inventory days 49 51 53 2021 2022 2023 2021 2022 2023 Group Retained business Group Retained business Anglo Ame
Slide 32: Committed to a strong balance sheet
Committed to a strong balance sheet Highly cash Investing in attractive generative business future-enabling growth 40% dividend 1.5x net debt:EBITDA payout leverage at bottom of cycle Anglo American 32
Slide 33: Pathway to execute while limiting value leakage
Pathway to execute while limiting value leakage with thoughtful stakeholder engagement ✓ Maximise value for our shareholders Divest in the right way ✓ Responsible, respectful engagement with stakeholders Tax impacts driven by commercial outcomes: ✓ proactively assessing Anglo American 33
Slide 34: Wrap-up
Wrap-up
Slide 35: Why the New Anglo American is a better deal
Why the New Anglo American is a better deal Through BHP offer New Anglo American delivers…. Anglo American shareholders will…. Not get full value recognition for a ✓ Full value from copper, simplification & Value world class portfolio cost efficiencies ✓ A simpler portfolio & structure focused B
Slide 36: New Anglo American delivers
New Anglo American delivers Unlocking Leading future- shareholder value enabling growth Delivering Enabled by world attractive returns class capabilities Anglo American 36
Slide 37: Sources & footnotes
Sources & footnotes 1. Based on attributable copper equivalent production in 2030F calculated using long term prices. 18. Sources: Anglo American analysis; “Re-thinking complex orebodies: Consequences for the future Future production levels are indicative and subject to further studies and final app
Slide 38: Q&A
Q&A Standard international dial-in: +44 20 3481 4247 Conference ID: 5169853 South Africa: +27 105 348 155 United Kingdom: +44 20 3481 4247 USA & Canada: +1 800 715 9871
Slide 39: Appendix
Appendix
Slide 40: Guidance summary
Guidance summary Earnings Capex1,4 Other Volumes See slide 41-42 2024 ~$5.7bn Net debt: EBITDA : <1.5x bottom of cycle Growth ~$1.2bn Unit costs See slide 43 Sustaining ~$4.5bn • Baseline ~$3.4bn • Lifex ~$0.7bn 2024 depreciation4 $3.0-3.2bn • Collahuasi desalination3 ~$0.4bn 2025 (previously ~$5.7b
Slide 41: Production outlook: unchanged
Production outlook: unchanged Units 2022 2023 2024F 2025F 2026F Copper1 kt 664 826 730-790 690-750 760-820 Nickel2 kt 40 40 36-38 35-37 35-37 Platinum Group Metals3 Moz 4.0 3.8 3.3-3.7 3.0-3.4 3.0-3.4 Diamonds4 Mct 35 32 26-29 30-33 32-35 Iron Ore5 Mt 59 60 58-62 57-61 58-62 Steelmaking Coal6 Mt 15
Slide 42: Production outlook continued: unchanged
Production outlook continued: unchanged Units 2022 2023 2024F 2025F 2026F Chile: 562 Chile: 507 Chile: 430-460 Chile: 380-410 Chile: 440-470 Copper1 kt Peru: 102 Peru: 319 Peru: 300-330 Peru: 310-340 Peru: 320-350 Own mined: 2.6 Own mined: 2.5 Own mined: 2.1-2.3 Own mined: 2.1-2.3 Own mined: 2.1-2.3
Slide 43: Unit costs outlook by Business: unchanged
Unit costs outlook by Business: unchanged Copper (C1 c/lb)1 Nickel (C1 c/lb) PGMs ($/PGM oz)2 -5% +11% -5% Chile: Chile: 200 ~190 154 166 Peru: ~157 Peru: 541 ~600 937 968 ~920 111 ~110 513 2022 2023 2024F 2022 2023 2024F 2022 2023 2024F Diamonds ($/ct)3 Iron Ore (FOB $/t)4 Steelmaking Coal ($/t)5 +
Slide 44: Quantified financial benefits statement
Quantified financial benefits statement "The Anglo American Directors expect that corporate restructuring intended as part of simplifying the Anglo American portfolio • The Anglo American Directors have, in addition, made the following assumptions, each of which is outside the influence of and incre