Slide 1: Interim Results
INTERIM RESULTS 24 February 2003 Chip Goodyear Chief Executive Officer Chris Lynch Chief Financial Officer
Slide 2: Highlights – half year ended 31 December 2002
Highlights – half year ended 31 December 2002 • Strong performance from diversified asset base in challenging market conditions • EBITDA solid at US$2,451 million • EBIT of US$1,659 million, attributable profit of US$931 million and earnings per share of US15.0 cents before exceptional items • Merge
Slide 3: Board & Management appointments
Board & Management appointments • John Buchanan – senior independent non-executive director • Mike Salamon – executive director • David Munro – chief development officer & executive committee • Chris Pointon - executive committee • Marcus Randolph - executive committee Interim Results Page 3 24 Febr
Slide 4: Interim Results
INTERIM RESULTS Chris Lynch Chief Financial Officer
Slide 5: Results highlights – half year ended December
Results highlights – half year ended 31 December (US$M) 2002 2001 % Change Turnover(1) 8,048 7,649 +5.2 EBITDA(1)(2) 2,451 2,395 +2.3 EBIT(1)(2) 1,659 1,596 +3.9 Attrib profit (excl exceptionals)(1) 931 1,155 -19.4 Exceptional items (19) - Attrib profit (incl exceptionals) 912 1,155 -21.0 Available
Slide 6: EBIT by Customer Sector Group
EBIT by Customer Sector Group Half year ended 31 December (US$M) 2002 2001 % Change Petroleum 660 576 +15 Aluminium 266 191 +39 Base Metals 83 69 +20 Carbon Steel Materials 506 565 -10 Diamonds & Spec Products 173 168 +3 Energy Coal 124 350 -65 Stainless Steel Materials 61 (36) Exploration & Technol
Slide 7: Impact of major commodity price changes on EBIT
Impact of major commodity price changes on EBIT Half year ended 31 Dec 02 v half year ended 30 Dec 01 US$M Petroleum products 200 180 150 Nickel & 100 Chrome 70 Met 50 Copper Manganese Coal 20 10 10 0 Others Aluminium -50 (15) (15) Iron Ore (40) Diamonds -100 (65) Energy Coal (95) Excludes impact of
Slide 8: Net interest, taxation & attributable profit
Net interest, taxation & attributable profit Continuing operations, excluding exceptionals Half year ended 31 December (US$M) 2002 2001 EBIT 1,659 1,596 Net interest expense (200) (262) Exchange impact on debt (58) 242 Discounting of provisions/Capitalised interest 13 (3) Profit before tax 1,414 1,5
Slide 9: Impact of restatements of net monetary liabilities
Impact of restatements of net monetary liabilities - Half year ended December Impact of Impact of (US$M) Dec 02 Restatement Dec 01 Restatement EBIT 1,659 (20) 1,596 35 Net interest (245) (58) (23) 242 Taxation expense (466) (60) (399) 150 Attributable profit 931 (138) 1,155 427 Exchange rates As at
Slide 10: Cash flow – from continuing operations
Cash flow – from continuing operations Half year ended 31 December (US$M) 2002 2001 Operating cash flow and JV dividends 1,969 2,000 Net interest paid (170) (242) Tax paid (540) (396) Available cash flow 1,259 1,362 Capital expenditure & investment (1,200) (1,103) Acquisitions & disposals 272 43 Net
Slide 11: Merger benefits – US$270M by end FY03
Merger benefits – US$270M by end FY03 FY 2002 (US$M) HY 2003 Total Revenue enhancement 25 Marketing operations 18 43 EBIT synergies 92 Operational ongoing 7 99 50 Operating Excellence 29 79 18 Strategic sourcing 4 22 185 Total EBIT synergies 58 243 35 Financing synergies 7 42 & marketing structure T
Slide 12: Strategic framework US$500m unit cost reduction target
Strategic framework US$500m unit cost reduction target FY2003 progress (US$M) HY 2003 Operating Excellence 32 Portfolio mix 38 Total savings 70 Interim Results Page 12 24 February 2003
Slide 13: Interim Results
INTERIM RESULTS Chip Goodyear Chief Executive Officer
Slide 14: CSG operating review – Petroleum, Aluminium
CSG operating review PETROLEUM • 21% (US$4.65/bbl) increase in average realised oil prices to US$27.19/bbl • Lower volumes at Liverpool Bay, Bass Strait and Laminaria • Increased costs, including price linked costs and depreciation • First gas from Bream gas pipeline 3 months ahead of schedule ALUMI
Slide 15: CSG operating review – Base Metals, Carbon Steel
CSG operating review BASE METALS • 4.6% (US$0.03/lb) increase in average realised copper prices to US$0.68 per lb • Lower exploration expenditure • Production cutbacks at Escondida and Tintaya offset by Antamina on stream • Commissioning of Escondida Phase IV project on tim e and within budget CARBO
Slide 16: CSG operating review – Diamonds, Energy Coal
CSG operating review DIAMONDS & SPECIALTY PRODUCTS • 28% reduction in average realised diamond prices due to product mix • Extended marketing activities for Ekati diamonds • Increased diamonds production due to increased plant throughput and processing efficiencies • Cost efficiencies achieved withi
Slide 17: CSG operating review – Stainless Steel, Marketing
CSG operating review STAINLESS STEEL MATERIALS • 29% increase in average realised nickel price to US$3.16/lb • 12% increase in ferrochrome production in response to increasing market demand • Increased nickel production due to ramp up of Cerro Matoso line 2 • Cost efficiencies at Cerro Matoso and QN
Slide 18: Deep inventory of projects
Deep inventory of projects BROW NFIELD CdC Exp’n Yabulu Mozal 2 R’thorpe Esc’da Mount PACE GoM Infrastr. Norte Arthur North Dendrobium Esc’da Zamzama Hillside 3 Sulphide Klipspruit Mining NWS Area C 4th Train CY2003 2004 2005 2006 2007 ROD Mad Ohanet Dog Atlantis Spence Angostura Aluminium Minerva B
Slide 19: Strategic focus
Strategic focus M&A Bolt-on Acq. Growth Pipeline Cost Savings Low Cost, High Quality Assets Interim Results Page 19 24 February 2003
Slide 20: China
China • Huge demand for metals and bulk commodities • Currently US$430 million of direct sales – more than 30% of alumina sales – more than 20% of iron ore sales • Doing business “In China” – Better management of supply chains – Access to transformed product • Marketing infrastructure in place • Inc
Slide 21: Summary and outlook
Summary and outlook • Strong operational performance from diverse asset base • EBIT strong and dividends up • Merger benefits target delivered • Commissioned Escondida Phase IV, San Juan underground and Bream gas pipeline • Growth projects all on track • Structure and strategy in place Interim Resul
Slide 22: Ohpoilliton
6dl Ohpoilliton
Slide 23: Growth pipeline – update on sanctioned projects: Minerals
Growth pipeline – update on sanctioned projects Minerals Project Commodity Share of Capex Target Progress US$M completion date Ahead of initial M ozal 2 (M ozambique) – 47.1% Aluminium 405 Q2 2003 schedule and under budget Ahead of initial Hillside 3 (South Africa) – 100% Aluminium 449 Q1 2004 sched
Slide 24: Growth pipeline – update on sanctioned projects: Petroleum
Growth pipeline – update on sanctioned projects Petroleum Project Commodity Share of Capex Target Progress US$M completion date Ohanet (Algeria) – 45% Gas 464 Q3 2003 On time On revised ROD (Algeria) – 36% Oil/gas 179 Q1 2004 schedule M ad Dog (US) – 23.9% Oil/gas 335 Q4 2004 On time Atlantis (US) –
Slide 25: EBIT analysis – Continuing operations
EBIT analysis – Continuing operations Half year ended 31 Dec 02 v half year ended 31 Dec 01 US$M 20 80 30 2,000 90 130 60 1,596 (140) 1,659 (120) (50) (37) 1,500 1,000 500 0 Half year Volume Prices Expln Costs Exch New Inflation Asset Price Other Half year ended rates operations Impact Sales linked
Slide 26: Financial ratios
Financial ratios 31 Dec 30 Jun 2002 2002 Net debt/(net debt + equity)(%) 37.5 35.0 EBITDA interest cover (times) 12.3 11.0 Return on capital (%) 12.4 11.0 Interim Results Page 26 24 February 2003
Slide 27: USD functional currency policy - general level of exposure
USD functional currency policy - general level of exposure (US$M) AUD Rand Impact Net payables, receivables & (400) (100) P&L employee provisions Tax provisions (700) (400) P&L Debt - (400) P&L Total (1,100) (900) P&L Restoration & Rehab (500) (100) Bal sheet Interim Results Page 27 24 February 2003
Slide 28: Key net profit sensitivities
Key net profit sensitivities Approximate im pact on annual net profit after tax of changes of: (US$M) US$1/bbl on oil price 45 US$1/t on iron ore price 25 US$1/t on metallurgical coal price 20 USc1/lb on aluminium price 15 USc1/lb on copper price 15 US$1/t on energy coal price 5 USc1/lb on nickel pr
Slide 29: Key net profit sensitivities
Key net profit sensitivities Approximate im pact on annual net profit after tax of changes of: (US$M) Australian dollar (USc1/A$) Operations (net of hedging)(1) 20 Net monetary liabilities(2) 20 South African Rand (0.2 Rand/US$) Operations(1) 15 Net monetary liabilities(2) 10 Rand debt(2) 10 (1) Imp
Slide 30: Strategic framework US$500m unit cost reduction target – Cost saving methodology
Strategic framework US$500m unit cost reduction target Cost saving methodology • Cost savings and efficiency gains resulting from corporate excellence and a focus on our core business – Operating excellence – Simplified corporate structure and processes – Marketing organisation – increased volumes a
Slide 31: Interim results under Australian GAAP
Interim results under Australian GAAP Half year ended 31 December (US$M) 2002 2001 Sales revenue 7,056 8,067 Profit before tax 1,275 1,696 Profit after tax attributable to members 891 1,177 Net operating cash flow 1,189 1,483 EPS (US cents) 14.4 19.5 EBITDA interest cover (times) 11.4 10.4 Interim R
Slide 32: Ohpoilliton
6dl Ohpoilliton