Rio Tinto Plc · LSE:RIO
Rio Tinto — Rio Tinto Alcan Financial community site visit, March 2008
18 slides from Rio Tinto's conference presentation, Mar 13, 2008
Slide 1: ASX cover letter for Canadian site visit presentation
120 Collins Street Melbourne 3000 Australia Postal Address: GPO Box 384D Melbourne 3001 Australia T +61 (0) 3 9283 3333 F +61 (0) 3 9283 3707 For personal use only Company Announcements Office Australian Stock Exchange Limited SYDNEY NSW 2000 13 March 2008 Dear Sir, The attached presentation was giv
Slide 2: Rio Tinto Alcan Financial community site visit
For personal use only Rio Tinto Alcan Financial community site visit 12 – 14 March 2008
Slide 3: Cautionary statement
Cautionary statement For personal use only This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (“Rio Tinto”) and comprises the slides for a presentation concerning Rio Tinto. By reviewing/attending this presentation you agree to be bound by the following conditions. Forward lo
Slide 4: Tom Albanese, Chief Executive
For personal use only Tom Albanese Chief Executive Financial community site visit (12 - 14 March 2008) 3
Slide 5: Outline
Outline For personal use only Tom Albanese Overview (30 mins) Dick Evans Rio Tinto Alcan (45 mins) Questions & Answers (30 mins) 20 MINUTE BREAK Carmine Nappi Aluminium market (30 mins) Questions & Answers (10 mins) 10 MINUTE BREAK Phillip Strachan Financial overview and integration (30 mins) Questi
Slide 6: Introduction
Introduction For personal use only • Continued value delivery for shareholders – 2007 results delivered records across the board: production, EBITDA, underlying earnings, cash flow from operations and capital investment • Outlook remains excellent in Rio Tinto’s key products • Alcan transaction – lo
Slide 7: Outlook remains favourable for key commodities
Outlook remains favourable for key commodities For personal use only Metals • Prices have continued to rise during 2008 140 Aluminium 135 • Assessment of Chinese GDP growth Copper 130 outlook of around 10% in 2008 Index (1 Jan = 100) 125 • Strong China-led demand increases for 120 most products expe
Slide 8: China/US de-coupling
China/US de-coupling For personal use only • Domestic demand remains the primary contributor to GDP • Modelling suggests Chinese GDP would fall by less than 1% if US demand were to slip to recessionary levels Composition of Chinese GDP 2007 Chinese Aluminium Semis Production 2007 Consumption Governm
Slide 9: Global GDP growth forecast to accelerate
Global GDP growth forecast to accelerate For personal use only World GDP 2000 terms, PPP basis, USD Trillions Developing CAGR Developed % 1975-05 2005-25 CAGR actual forecast 4.3% 140 125 Rest of world 120 India 5.0 6.5 100 3.5% China 80 South America 60 54 Asia Pacific developed 40 Europe 2.6 2.7 2
Slide 10: Strong position in metals well placed to benefit from global growth
Strong position in metals well placed to benefit from global growth For personal use only Consumption of metals increases in line with increasing income 2007 population distribution Expenditure per capita US$ (2007 terms) World average income per capita 30% 60 2007 2022 India China 25% 50 Aluminium
Slide 11: Aluminium consumption over the next years expected to total 2 to 3 times all human history
Aluminium consumption over the next 25 years is expected to total 2 to 3 times the For personal use only amount used in all human history Primary Aluminium Consumption 300 250 Actual 2025-50 Forecast (base case) 3.5% Forecast (high case) 200 CRU Million tonnes Brook Hunt 150 2000-25 100 6.3.% 2.8% 1
Slide 12: Alcan deal transforms competitive regional product group into a global leader
Alcan deal transforms competitive regional product group into a global leader… For personal use only 2007 proforma underlying earnings by product group1 Diamonds & Minerals, 5% Energy, 5% • Aluminium takes its place alongside Iron Ore Copper, gold, and Copper as a sector leader moly, 38% • Strong in
Slide 13: Strengthens our stable platform for global growth
…and strengthens our stable platform for global growth For personal use only Rio Tinto Group 2007 pro forma revenues by region of origin North America Europe 33% 12% 2% Asia Africa 5% S. America 8% Australia 40% 2007 revenues = $41bn 1 1. Data under IFRS. Includes Alcan revenues from January 1, 2007
Slide 14: Alcan investment assumptions are being realised, only faster
Alcan investment assumptions are being realised… only faster For personal use only Assumption in July 2007: Outcome in March 2008: Short term pressures would see prices continue to rise 9 Increasing energy and electricity costs • Rising coal prices and power costs in 9 Chinese government restriction
Slide 15: Alcan created a balanced supply chain with best in class assets
The Alcan investment created a balanced supply chain with best in class assets For personal use only Bauxite Competitive advantages: 32 Mtpa • Balanced supply chain • World’s largest bauxite reserves and External Sales resources Alumina • Competitive refining • 48% owned power, 64% Hydro power 8.5 M
Slide 16: Impressive portfolio of growth options to capture value upside
Impressive portfolio of growth options to capture value upside For personal use only Bauxite Alumina Aluminium Mt Mt Mt 55 17.3 +7% +9% +6% CAGR CAGR CAGR 6.5 32 8.5 4.2 2007 2015 2007 2015 2007 2015 All volumes shown on an attributable 2007 pro forma basis Financial community site visit (12 - 14 Ma
Slide 17: Illustrative analysis of increasing prices and volumes on Rio Tinto Alcan
Illustrative analysis of increasing prices and volumes on Rio Tinto Alcan For personal use only Illustrative analysis of incremental impact on value US$ Billion NPV $33 B $23 B $8 B Base Case July 2007 Forward curve Forward curve Forward curve+ Consensus reverting to Feb 08 continued from 350ktpa of
Slide 18: Summary – continued value creation
Summary – continued value creation For personal use only • The Alcan deal has created an industry leader – asset quality, competitive position, growth options • The outlook for aluminium gets better and better • Rio Tinto saw the trend early and clearly • New global business of scale complements cop
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