Antofagasta Plc · LSE:ANTO
Antofagasta — FY2020 Earnings Presentation
34 slides from Antofagasta's earnings presentation, Mar 16, 2021
Slide 1: Antofagasta plc 2020 FY Results
Antofagasta plc 2020 FY Results Mauricio Ortiz Chief Financial Officer 16th March 2021 Developing mining for a better future
Slide 2: Cautionary statement
Cautionary statement This presentation has been prepared by Antofagasta plc. By reviewing and/or attending this presentation you agree to the following conditions: This presentation contains forward-looking statements. All statements other than historical facts are forward-looking statements. Exampl
Slide 3: Agenda
Agenda 1 Overview 2 Financial review 3 Growth opportunities and investment case 3
Slide 4: Overview
Overview 4
Slide 5: 2020 highlights: Strong EBITDA margin and balance sheet
2020 highlights Strong EBITDA margin and balance sheet Safety Financial results Balance sheet and dividend Record year of safety EBITDA: $2,739m Net debt of $82m performance EBITDA margin2: 53% Net debt/EBITDA of 0.03x No fatal accidents LTIFR1: 0.86 EPS3: 54.7 c/share Final dividend 48.5 c/share Co
Slide 6: COVID-19 response and recovery
COVID-19 response and recovery Focus on protecting our people and local communities COVID-19 situation in Chile Impact on operations Antofagasta’s response ▪ Some local lockdowns still in place ▪ All sites have kept operating throughout ▪ Focus on protecting our people and local ▪ Health system has
Slide 7: Sustainability
Sustainability Short-term emission and water usage targets Water efficiency and transition to sea water Approved Climate Change Strategy ▪ Centinela and Antucoya use raw sea water ▪ 5 Pillars, including energy and water transitions ▪ Currently building a 400 l/s desalination plant at Los ▪ Committed
Slide 8: 2021 guidance
2021 guidance Copper production (kt) Copper production Guidance1 • Guidance 730-760,000t 770 730-760 • Higher production as ore grades increase at 725 734 Antucoya & 130 Centinela Concentrates 120 140 125 Zaldívar Cash costs Centinela 248 277 247 275 • Cash costs before by-products of $1.65/lb • Net
Slide 9: Copper market
Copper market Short term Copper price and exchange stocks ▪ Synchronised global government stimulus through monetary and Thousand c/lb Tonnes fiscal incentives, led initially by China ▪ Cyclical recovery following pandemic’s impact on supply & demand 500 1,000 ▪ Record net long financial positions f
Slide 10: Financial review
ANTOFAGASTA PLC a lls.
Slide 11: 2020 financial highlights
2020 financial highlights Strong EBITDA margin and balance sheet Revenue Net cash cost EBITDA $1.14/lb EBITDA: $2,739m 6.6% lower than in 2019 12% higher than last year $5,129m 3.3% higher than in 2019 $197m EBITDA margin2: 53% Savings from CCP1 Increased from 49% in 2019 Underlying earnings per sha
Slide 12: Operational performance
Operational performance Guidance achieved: 733,900 tonnes at $1.14/lb Los Pelambres Centinela Antucoya Zaldívar Transport Cu production Cu production Cu production Cu production1 Tonnage 359,600 t 246,800 t 79,300 t 48,200 t transported Net cash costs Net cash costs Cash costs Cash costs 6,444 kt $0
Slide 13: Production and cash costs
Production and cash costs (36) 770 Copper 19 Production 734 (6) (3) (1) kt (45) Copper Grade Throughput Recovery Work-in-progress ROM Copper 2019 FY inventories and others 2020 FY (0.09) 1.65 0.08 0.01 1.56 Cash costs (0.05) (0.05) (0.09) by cost type 1.14 (0.42) $/lb Pre-credit FX & Input Lower Gra
Slide 14: EBITDA
EBITDA EBITDA1 and margin2 2019 FY versus 2020 FY $ million and % 49% 53% $300m (+12%) 26 7 133 3 $2,739m (44) 383 $2,439m (208) 2019 FY Sales volumes Realised Mining costs Exploration Corporate Associates Transport 2020 FY EBITDA and TC/RCs prices & evaluation costs & JVs division EBITDA 1 Results
Slide 15: Balance sheet
Balance sheet Net cash / (debt) and Net debt/EBITDA ratio $ million and times $481m 2,647 (216) (320) 0.23x 0.03x ratio1 ratio1 210 $312m $34m (1,307) (40) (81) (411) $(82)m $(563)m Net cash (debt) - Net cash EBITDA from Working Tax Capex Net interest Others and Subordinated Dividends Net cash Net c
Slide 16: Capital allocation drives decision making
Capital allocation drives decision making 2020 Operating Cash Flow1 $2,431m Copper • Stress test forecasts at various copper prices Price Free Sustaining Capex & Mine Development $748m • Future free cash flow generation Cash • Cash buffer Flow DECISION Committed Dividends (35% pay-out) $189m FACTORS
Slide 17: Capital expenditure
Capital expenditure Guidance $1.6bn Capital expenditure1 $ million $1,307m $1,079m 890 Growth $899m 571 $873m 279 144 61 276 68 37 70 Transport & corporate 32 392 341 221 310 265 Mining sustaining 371 352 347 357 375 Mine development 2017 2018 2019 2020 2021E Sustaining ratio 2017 2018 2019 2020 202
Slide 18: Growth opportunities and investment case
Growth opportunities and investment case 18
Slide 19: Growth opportunities
Growth opportunities 2020 2021 2022 2023 2024+ LOS PELAMBRES EXPANSION - PHASE 1 (in construction) PHASE 2 (in FS stage) Cu +60 ktpa | Capex $1.7 bn1 (including desalination plant) Cu +35 ktpa | Capex $0.5 bn2 15 year LOM extension Organic ESPERANZA SUR PIT (in construction) CENTINELA 2ND CONCENTRAT
Slide 20: Los Pelambres Expansion - Phase I
Los Pelambres Expansion - Phase I 60,000 tonnes1 of additional copper • Optimise throughput within the limits of the existing operating, environmental and water extraction permits • Increasing plant capacity from 175ktpd to 190ktpd • Annual copper production will increase by an average of 60,000 ton
Slide 21: Centinela's Esperanza Sur pit
Centinela´s Esperanza Sur pit 10-15,000 tonnes of additional copper • Will improve Centinela’s flexibility to supply its concentrator • Over the initial years, the higher grade material from the pit will increase copper production by 10–15,000tpa • Once pre-stripping is completed, autonomous trucks
Slide 22: Zaldívar Chloride Leach
Zaldívar Chloride Leach 10-15,000 tonnes of additional copper • Increase copper recoveries by approximately 10 percentage points • Upgrade SX plant, new reagents facilities and additional washing ponds • Project completion planned for H1 2022 • $190 million capital cost unchanged 22
Slide 23: Transformational innovation - key to strategy
Transformational innovation - key to strategy Integrated Remote Operations Centre ▪ Primary sulphides leach (Cuprochlor-T®) industrial scale (IROC) in the city of Strategic testing underway Antofagasta for Centinela Initiatives ▪ Low cost bulk material movement technologies ▪ Thickened tailings and
Slide 24: Our priorities for 2021 and beyond
Our priorities for 2021 and beyond Continuing our record of zero fatalities and protecting employees and communities from COVID-19 Embed climate change and sustainability strategy across all decision making and update climate change targets Maintaining operating resilience and flexibility Continuous
Slide 25: Investment case: Responsible copper producer
Investment case Responsible copper producer Sustainability High quality assets Operating efficiency Financial position ▪ Zero fatalities culture ▪ Strong and growing ▪ Constant focus on unit costs ▪ Strong balance sheet ▪ Safety and health model production ▪ Continuous productivity ▪ Healthy cash fl
Slide 26: Appendix
. ANTOFAGASTA PLC » Appendix
Slide 27: Revenue
Revenue Revenue 2019 FY versus 2020 FY1 $ million $164m 348 70 $5,129m (153) (11) $4,965m (90) 2019 FY Copper price Copper sales By-products TC/RC Transport division 2020 FY 1 Excludes Zaldívar (JV) 27
Slide 28: Net earnings
Net earnings Net earnings 2019 FY versus 2020 FY $ million $38m 344 (128) (19) (52) (40) $539m $506m $501m (67) (36) 2019 FY EBITDA from Depreciation Associates Net Tax Non-controlling 2020 FY Exceptional 2020 FY Net earnings subsidiaries and and JVs finance costs interests Net earnings items and Ne
Slide 29: Cash flow
Cash flow Cash flow in 2020 FY1 $ million $1,480m 2,647 (216) 210 (320) 918 $3,673m (411) (1) (1,307) (40) $2,193m Cash at EBITDA from Working Tax Capex Net Net Capital Dividends Others Cash at 1 Jan 2020 subsidiaries capital1 interest borrowings increase 31 Dec 2020 (Marubeni) 1 Excludes Zaldívar (
Slide 30: 2020 FY production cost breakdown
2020 FY production cost breakdown 0.31 $1.67/lb Others 0.42 $1.56/lb Energy 7% 12% Other inputs 8% (0.20) Sulphuric acid 4% 14% Labour $1.14/lb Fuel and Lubricants 5% $2,705m Materials and spare parts 14% 17% Services 14% Net cash costs By-products Pre-credit TC/RC & Mine Production costs Maintenanc
Slide 31: Production and metals prices
Production and metals prices Group production Metal prices 2017 2018 2019 2020 2021E1 2017 2018 2019 2020 Copper ('000 tonnes) Copper ($/lb) Los Pelambres 343.8 357.8 363.4 359.6 340-350 Realised 3.00 2.81 2.75 2.98 Centinela Concentrates 163.9 155.5 195.5 153.5 LME 2.80 2.96 2.72 2.80 270-280 Centi
Slide 32: Unit cash costs
Unit cash costs Group cash costs 2017 2018 2019 2020 2021E1 Group cash costs ($/lb) Los Pelambres 1.44 1.52 1.40 1.27 1.45 Centinela 1.81 1.89 1.83 1.85 1.75 Antucoya 1.68 1.99 2.17 1.82 1.80 Zaldívar2 1.62 1.94 1.75 1.80 1.75 Cash costs before by-products credits ($/lb) 1.60 1.72 1.65 1.56 1.65 By-
Slide 33: Antofagasta contacts
Antofagasta contacts Andrew Lindsay alindsay@antofagasta.co.uk Andrés Vergara avergara@antofagasta.co.uk Director, London Office Tel: +44 20 7808 0988 Investor Relations Manager Tel: +44 20 7808 0988 33
Slide 34: www.antofagasta.co.uk
www.antofagasta.co.uk WN ANTOFAGASTA PLC