Slide 1: 2014 Preliminary Results
2014 Preliminary Results London, 3 March 2015 Mt Owen coal, Australia
Slide 2: Basis of preparation and disclaimer
Basis of preparation and disclaimer Basis of preparation The reported financial information has been prepared on the basis as outlined in note 1 of the financial statements with the exception of the accounting treatment applied to certain associates and joint ventures for which Glencore’s attributab
Slide 3: Highlights
CCR copper refinery, Canada Highlights Ivan Glasenberg – Chief Executive Officer
Slide 4: 2014 Highlights
2014 Highlights(1) Strong financial performance despite difficult market conditions • Adjusted EBITDA(2) of $12.8bn, down 2% • Marketing Adjusted EBIT(2) of $2.8bn, up 18% • Net income(3) of $4.3bn, down 7% • Industrial synergies and cost savings of $1.9bn realised Robust balance sheet and strong ca
Slide 5: Sustainability and governance
Sustainability and governance Safety LTIFR(1) 2009 to 2014 • Regrettably 16 fatalities in 2014 (26 in 2013) 2.96 • Reduction on 2013 reflects ‘SafeWork’ focus on safety 2.74 leadership, culture and implementation of Fatal Hazard 2.49 47% reduction Protocols • Significant performance improvement at D
Slide 6: Financial performance
Ulan West coal, long wall operation, Australia Financial performance Steven Kalmin – Chief Financial Officer
Slide 7: Financial performance highlights
Financial performance highlights • Robust financial performance despite difficult $12.8bn $4.3bn $33cents market conditions Adjusted EBITDA, Net income pre- Earnings per share, • Weaker prices largely offset down 2% significant items, down 6% by resilience of the down 7% marketing business • 24% dec
Slide 8: Marketing EBIT up 18%
Marketing EBIT up 18% Adjusted EBIT 2013 vs 2014 ($M) Metals & Minerals: Energy: Strongest performance Modestly lower adjusted decrease in EBIT since 2008. Adjusted EBIT Agriculture: EBIT largely reflects the reflects oversupplied up 18% to $2.8bn, Strong contribution from impact of challenging coal
Slide 9: Robust industrial financial performance despite weaker prices
Robust industrial financial performance despite weaker prices Adjusted pro forma EBITDA/EBIT 2013 vs 2014 ($M) Healthy industrial performance despite Energy: Metals & Minerals: Agriculture: generally weaker Higher production Impact of weaker copper Significant improvement in commodity prices. volume
Slide 10: Benefit of merger synergies/cost efficiencies, volume growth and FX gains
Benefit of merger synergies/cost efficiencies, volume growth and FX gains only partially offset lower prices and extra depreciation (non-cash) Industrial Adjusted EBIT pre-exceptional items – 2012 to 2014 ($M)(1) $1.9bn cost savings 1'020 1'738 389 1'299 (517) (997) 215 666 (453) 1'344 (227) 6'461 (
Slide 11: Robust balance sheet and strong cashflow coverage
Robust balance sheet and strong cashflow coverage Net 52.2 54.4 • Robust liquidity position with $9.4bn of funding(1) committed undrawn credit facilities and cash ($bn) 49.2 as of 31 December 2014 49.8 • Strong cashflow coverage ratios: • FFO to Net debt of 33.3% Net debt(1) 34.8 37.6 • Net debt to
Slide 12: $2.8 billion reduction in 2014 capex
$2.8 billion reduction in 2014 capex Metals & Minerals:$5.7bn(1) Energy: $2.2bn Total capex: $8.6bn(1) (24%) Expansionary -$2.8bn Marketing and capitalised interest 7'025 -$1,826M 4'175 4'224 2'568 Sustaining -$1,164M 2'704 4'059 3'860 3'316 3'146 1'549 694 685 2013 2014 2013 2014 2013 2014 Notes: 2
Slide 13: 2015E industrial capex at $6.5-6.8bn, down from $7.9bn
2015E industrial capex at $6.5-6.8bn, down from $7.9bn • Reduction of $1.1 - 1.4bn of capital has been identified $7.9bn across the business Investor day 2014 forecast for 2015: • Reduction of c.$200M in sustaining capital through further $3.6bn expansionary + cost efficiencies and lower cost inputs
Slide 14: Returning excess capital to shareholders in 2014
Returning excess capital to shareholders in 2014 Excess capital allocation matrix +2.3bn -8.4bn Working Capex net of • Investment capital change disposals M&A / opportunities also +4.5bn brownfield screened against returns generated from Net acquisitions and disposals projects buybacks screened agai
Slide 15: 2015 Priorities
2015 Priorities Ivan Glasenberg – Chief Executive Officer Ulan West coal pre-shift safety briefing
Slide 16: Confidence in our outlook
Confidence in our outlook • Our key earnings’ drivers accounted for 95% of EBIT in 2014 • Market balances for many of our commodities have transitioned (or are transitioning) into deficit • Operational leverage provides significant earnings upside as and when prices inevitably recover • Group is com
Slide 17: Our priorities for 2015
Our priorities for 2015 Deliver Operating growth efficiency from remaining key projects: McArthur Achieving at or near first River, Katanga, quartile costs/margins Koniambo and Chad oil Confidence • Grow base dividend Capital • Return excess capital to BBB/Baa shareholders discipline Maintain strong
Slide 18: Q&A
Installing ground support at the George Fisher zinc mine, Australia Q&A DVM
Slide 19: Appendix
Temperature monitoring, Raglan nickel, Canada Appendix
Slide 20: Final 2014 distribution
Final 2014 distribution • Increased final distribution reflects Distribution payments (US cents per share) confidence in our outlook and +9.1% financial position 18.0 • Final cash distribution of 12 cents per share declared, representing a +4.8% 9% increase in the full year dividend 16.5 to 18 cents
Slide 21: Adjusted and reported EBITDA
Adjusted and reported EBITDA The impact of the proportionate consolidation of certain associates and joint ventures and the Xstrata acquisition pro forma adjustments, are set out in the following table: Adjustment 2014 Adjustments for 2014 for 2013 proportionate 2013 US$ million proportionate Adjust
Slide 22: Industrial 2015 EBIT sensitivity
Industrial 2015 EBIT sensitivity US$M Indicative full year(1) 10% movement in copper price 1,300 10% movement in zinc price 280 10% movement in lead price 60 10% movement in nickel price 160 10% movement in ferrochrome price 125 10% movement in gold price 110 10% movement in silver price 60 10% move