Anglo American Plc · LSE:AAL
Anglo American — Corporate Update (December 2019)
28 slides from Anglo American's corporate update, Dec 10, 2019
Slide 1: Investor Update Call
INVESTOR UPDATE CALL 10 December 2019 Grosvenor longwall
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT Disclaimer: This presentation has been prepared by Anglo American plc (“Anglo American”) and comprises the written materials/slides for a presentation concerning Anglo American. By attending this presentation and/or reviewing the slides you agree to be bound by the following con
Slide 3: We have come a long way: driving a transformed business
WE HAVE COME A LONG WAY Driving a transformed business… Portfolio restructuring Production index Copper Equivalent (Cu Eq)1 Productivity index (Cu Eq tonnes/full-time equivalent)2 Cu Eq unit cost1 +103% Technical reconfiguration productivity2 108 Operating model (28)% Unit costs1 2012 2013 2014 2015
Slide 4: We have come a long way: improved competitive position
WE HAVE COME A LONG WAY …and an improved competitive position Portfolio restructuring Average quality adjusted cost curve position3 47% Improved from 49th percentile (2013) Peer range Technical reconfiguration 36% 34% 108 Operating model Anglo American Peers 44
Slide 5: High quality bulks business
HIGH QUALITY BULKS BUSINESS Operational excellence Transformed portfolio High quality products Production Metallurgical coal Mt +200% ~85% Met Coal longwall productivity4 Hard coking coal 82 30 17 75 43 Iron ore +125% 2012 Long-term ~65% Fe Kumba large shovel efficiency5 Minas-Rio & Kumba Iron ore M
Slide 6: Strength in diversity
STRENGTH IN DIVERSITY Challenging Diamond market Ongoing strong cost Strong PGM prices in 2019 conditions performance at Copper -26% y-o-y 5% improvement +39% YTD revenue vs 2018 in 2019 unit cost vs previous guidance; further YTD PGM basket price, benefitting from strong (lower volumes, mix & price
Slide 7: Financial Update
FINANCIAL UPDATE Stephen Pearce Moranbah-Grosvenor wash plant
Slide 8: Continued delivery of improvements
CONTINUED DELIVERY OF IMPROVEMENTS 2019 production7 2020 production7 1-2% ~3% vs 2018, driven by Minas-Rio and Met Coal vs 2019 2019 unit costs7 2020 unit costs7 ~5% lower ~2% up vs 2018 vs 2019, at flat FX 88
Slide 9: Other 2019 full year guidance
OTHER 2019 FULL YEAR GUIDANCE Share buyback to date Inventory build Depreciation8 ~$0.8bn ~$0.5bn ~$3bn plus $0.3bn treasury shares & primarily De Beers up from 2018 due to Minas-Rio $0.5bn IFRS leases and Met Coal longwalls Net interest Cost & volume improvement8,9 Tax rate8 ~$0.4bn ~$0.3bn ~30% Ca
Slide 10: Net debt increase with buyback and growth capex
NET DEBT INCREASE WITH BUYBACK AND GROWTH CAPEX Net debt ($bn) Higher capex10 H2 vs H1 ~5.2 Share buyback ~1.0 ~$0.3bn Mitsubishi share of H1 adj net debt ~0.8 Primary items impacting net debt ~$4.9bn 3.4 H1 adj net debt excl Mitsubishi share H1 2019 H1 2019 adjusted 10 10
Slide 11: Attractive high-returning growth options drive near-term capex
ATTRACTIVE HIGH-RETURNING GROWTH OPTIONS DRIVE NEAR-TERM CAPEX Capex10 ($bn) $4.7 - 5.5bn $4.7 - 5.2bn (previously $4.7 - 5.2bn) ~$3.7bn 1.5-1.7 1.5-2.0 (previously $3.8 - 4.1bn) Growth ~0.7 3.2-3.5 3.2-3.5 Sustaining ~3.0 2.8-3.1 2019 2020F 2021-22F Long-term per annum11 Excludes Mitsubishi share o
Slide 12: Key production updates
KEY PRODUCTION UPDATES 2019F 2020F 2021F 2022F Diamonds12 Mct ~31 32-34 34-36 33-35 (previously 33-35) (previously 35-37) Copper12 kt 630-650 620-670 620-680 Chile: 600-660 (previously 620-680) (previously 590-650) Peru: 100-150 Platinum12 Moz 2.0-2.1 2.0-2.2 2.0-2.2 2.0-2.2 Palladium12 Moz 1.3-1.4
Slide 13: Key unit cost guidance
KEY UNIT COST GUIDANCE De Beers (US$/ct)12 Copper (C1 USc/lb)12 PGMs (US$/Pt oz)12 previously previously ~65/ct ~c135-140/lb 60 ~63 ~60 134 ~130 ~125 1,561 <1,600 <1,600 2018 2019F 2020F 2018 2019F 2020F 2018 2019F 2020F Minas-Rio (FOB US$/t)12 Kumba (FOB US$/t)12 Met Coal (US$/t)12 n/a ~24 ~26 32 ~
Slide 14: Targeting $3-4bn cost & volume improvement
TARGETING $3-4BN COST & VOLUME IMPROVEMENT $0.7bn9 achieved to date, further $0.4bn targeted in 2020 Operating Model & P101 Technology and Innovation Project Delivery Met Coal longwalls Bulk sorting Quellaveco (Copper) Minas-Rio Coarse particle recovery Moranbah-Grosvenor (Met Coal) Target: ~$1.5bn
Slide 15: Balanced & disciplined approach
BALANCED & DISCIPLINED APPROACH Attractive growth Strong margin Resilient balance sheet ~20-25% ~45-50% <1.5x Cu Eq production1,13 – by 2023 Mining EBITDA margin14,15 bottom of the cycle net debt:EBITDA8 15 15
Slide 16: Growing Quality
GROWING QUALITY Mark Cutifani
Slide 17: Our capabilities leverage asset quality
OUR CAPABILITIES LEVERAGE ASSET QUALITY Marketing: premium prices for premium products P101 Operating Model Exceeding industry best-in-class equipment & process performance FutureSmart Technical changes MiningTM Game-changing technology; data analytics; sustainability Incremental improvement Step-ch
Slide 18: And growth is all about value
AND GROWTH IS ALL ABOUT VALUE Growth in... quality volume margins returns within disciplined capital allocation framework 18 18
Slide 19: Projects on time and on budget
PROJECTS ON TIME AND ON BUDGET Quellaveco (Copper) Marine Namibia (Diamonds) 2020 capex (100%) 2020 capex10 ~$1.5bn to ~$1.7bn ~$0.1bn Our share10: ~$0.9bn to ~$1.0bn Project on track High value diamonds Plant earthworks complete, concrete progressing well, first steel and equipment installed Constr
Slide 20: Asset quality plays to global demand themes
ASSET QUALITY PLAYS TO GLOBAL DEMAND THEMES Diamonds Copper PGMs Bulks World leader World class growth World leader High quality niche Consumer World Greener World Electrified World 20 20
Slide 21: Investment proposition
INVESTMENT PROPOSITION “Leading capabilities actively improving a world-class asset base to drive sustainable, competitive returns” Assets Capabilities Returns Focus on quality Operating Model Capital discipline Long life Innovation & Sustainability leader Dividend payout ratio FutureSmart MiningTM
Slide 22: Footnotes
FOOTNOTES 1. Copper equivalent is calculated using long-term consensus parameters. Excludes 13. The margin represents the Group’s underlying EBITDA margin for the mining domestic / cost-plus production. Production shown on a reported basis. Includes business. It excludes the impact of PGMs purchases
Slide 23: Products that improve people's lives
Q&A Copper: electrification supporting renewables PGMs: air quality & lower emissions Diamonds: aspiration & growing prosperity Quality bulks: modern infrastructure development PRODUCTS THAT IMPROVE PEOPLE’S LIVES 23 23
Slide 24: Production outlook
PRODUCTION OUTLOOK Units 2018 2019F 2020F 2021F 2022F Diamonds1 Mct 35 ~31 32-34 34-36 33-35 (previously 33-35) (previously 35-37) Copper2 kt 668 630-650 620-670 620-680 Chile: 600-650 (previously 620-680) (previously 590-650) Peru: 100-150 Platinum3 Moz 2.5 2.0-2.14 2.0-2.24 2.0-2.24 2.0-2.24 Palla
Slide 25: Unit costs performance by business unit
UNIT COSTS PERFORMANCE BY BUSINESS UNIT De Beers (US$/ct)1 Copper (C1 USc/lb) PGMs (US$/Pt oz)2 Kumba (FOB US$/t) previously previously ~65/ct ~c135-140/lb 60 ~63 ~60 134 ~130 ~125 1,561 <1,600 <1,600 ~33 ~36 32 2018 2019F 2020F 2018 2019F 2020F 2018 2019F 2020F 2018 2019F 2020F Minas-Rio (FOB US$/t
Slide 26: H1 2019 simplified earnings by BU
H1 2019 SIMPLIFIED EARNINGS BY BU $m (unless stated) De Beers Copper PGMs Kumba Minas-Rio Met Coal Thermal Coal Nickel Other1 Total (iron ore) Sales volume (mined share) 15.5Mct2 307kt 612koz Pt3 21.4Mt 10.6Mt 9.9Mt4 13.6Mt5 18.6kt Benchmark price n/a $6,165/t6 n/a $91/t7 $106/t8 $191/t9 $69/t10 $12
Slide 27: H1 2019 simplified earnings by BU - notes
H1 2019 SIMPLIFIED EARNINGS BY BU - NOTES PGMs basket price Iron ore realised price Coal blended price & unit cost Own mined Coal weighted ave Unit Price Volume Revenue Kumba Minas-Rio Price Volume PGMs basket prices & unit cost cost Platinum $833/oz 612koz $509m Platts 62% CFR $91/t HCC $205/t 8.2M
Slide 28: Investor Relations
INVESTOR RELATIONS Paul Galloway paul.galloway@angloamerican.com Tel: +44 (0)20 7968 8718 Robert Greenberg robert.greenberg@angloamerican.com Tel: +44 (0)20 7968 2124 Emma Waterworth emma.waterworth@angloamerican.com Tel: +44 (0)20 7968 8574 28 28