Glencore Plc · LSE:GLEN
Glencore — FY2012 Earnings Presentation
36 slides from Glencore's earnings presentation, Mar 5, 2013
Slide 1: Glencore Preliminary Results 2012
Glencore Preliminary Results 2012 5 March 2013
Slide 2: Ivan Glasenberg, Chief Executive Officer
Ivan Glasenberg Chief Executive Officer I 1
Slide 3: 2012 highlights
2012 highlights Resilient EBIT performance, highlighting robustness of Glencore’s marketing business and industrial assets – Adjusted EBIT(1) down 17% to $4.5bn • Marketing Adjusted EBIT up 11%, with strong performance in Metals and Agriculture • Adjusted EBIT in consolidated Industrial activities
Slide 4: Robust 2012 financial and operating performance
Robust 2012 financial and operating performance Net Income change 2012 vs 2011(2) (%) (25%) (40%) (52%) (54%) Glencore (including Peer 1 Peer 2 Peer 3 stake in Xstrata) Marketing activities delivered improved results in 2012, generating adjusted EBIT of $2.1bn, an Marketing increase of 11% compare
Slide 5: 2012 relative operating performance – in controlled industrial activities
2012 relative operating performance – in controlled industrial activities Absolute EBIT change 2012 vs 2011 EBIT margin change 2012 vs 2011 (%) (bps) (340) (27%) (1,110) (1,160) (39%) (1,730) (44%) (46%) Glencore (excluding Peer 1 Peer 2 Peer 3 Glencore (excluding Peer 1 Peer 2 Peer 3 stake in Xstra
Slide 6: Organic growth – Glencore's own production
Organic growth – Glencore’s own production Cu equivalent production volume (in thousand tonnes, 100% basis) 2012A – 2016E 2,000 CAGR: 11.2% 1,800 1,600 2014E – 2016E CAGR: 3.6% 1,400 1,200 2012A – 2014E CAGR: 19.3% 1,000 800 600 400 200 - 2012A 2014E 2016E Other assets Kazzinc Kazzinc Katanga Katang
Slide 7: Steven Kalmin, Chief Financial Officer
Steven Kalmin Chief Financial Officer I 6
Slide 8: Key financial highlights
Key financial highlights US$ m 2012 2011 % change Revenue 214,436 186,152 15% Adjusted EBITDA (1) (3) 5,943 6,464 (8%) Adjusted EBIT (2) (3) 4,470 5,398 (17%) Net income attributable to equity holders (3) 3,060 4,060 (25%) Statutory net income attributable to equity holders 1,004 4,048 (75%) Funds f
Slide 9: 2012 financial performance – Marketing activities
2012 financial performance – Marketing activities Strong underlying profitability, with Adjusted EBIT up 11% over Adjusted EBIT 2012 vs 2011 (US$ m) 2011, highlighting strength and resilience of Glencore’s 4,000 diversified and integrated business model Metals and minerals 3,200 Improved results
Slide 10: 2012 financial performance – Industrial activities
2012 financial performance – Industrial activities Key industrial growth projects continued to deliver overall volume Adjusted EBIT 2012 vs 2011 improvement and remain on time and within budget (US$ m) 4,000 Decline in Industrial Adjusted EBIT owing primarily to weaker 3,487 average period-on-pe
Slide 11: 2012 Adjusted EBIT bridge for industrial activities
2012 Adjusted EBIT bridge for industrial activities (US$ m) 5,000 4,000 807 61 3,487 (237) (352) (68) 3,000 (537) 2,340 (821) 2,000 1,000 0 2011 Adj. EBIT Price Volume Cost FX D&A Other Associate 2012 Adj. EBIT Income I 10
Slide 12: Robust balance sheet
Robust balance sheet(1) Robust balance sheet with $9bn of committed liquidity 2012 2011 headroom as at 31 December 2012 – Current capital employed ($23.9bn) plus liquid stakes in Gross debt $35.5bn $28.1bn listed associates(3) covers 115% of total gross debt Net funding $32.7bn $26.7bn Strong ca
Slide 13: DRC Copper
DRC Copper Telis Mistakidis Co-Director of Zinc, Copper and Lead I 12
Slide 14: DRC Copper – 2012 in perspective
DRC Copper – 2012 in perspective Power a major issue Mutanda expansion to 200ktpa on track – Ownership increased to 60% – Put / call option for additional 20% in December 2013 (when exercised Mutanda ownership of 80%) Katanga continues the plant refurbishment program to replace old plant and m
Slide 15: DRC power situation (1/2)
DRC power situation (1/2) MW 2012 2013E Katanga province demand (650) (683) Katanga province generation 340 340 INGA supply – pre World Bank converter 150 - and synchronous condenser INGA supply – post World Bank converter - 220 and synchronous condenser Zambian supply 100 100 Nzilo supply – Glencor
Slide 16: DRC power situation (2/2)
DRC power situation (2/2) Investment $95m investment in 345 MW of generation (3 turbines at Inga and Nzilo) $110m investment in transformers (Inga and Kolwezi) $115m investment in transmission and associated infrastructure Synchronous condenser after explosion Timeline for power generation 2
Slide 17: Mutanda expansion on track
Mutanda expansion on track 87kt of copper production in 2012 18 days lost production due to power 2012 peak power 45 MW; 2013E peak power 78 MW Expansion update – 6 of 7 EW lines operating – EW 7 – March 2013 – New Mill – August 2013 (matches front end to EW capacity) Annualised 200ktpa of
Slide 18: Katanga 2012
Katanga 2012 Mined total of 228k MT of copper in ore in 2012 67 days lost production due to power – Poor power stability and frequency from Katanga’s sub-station impacted by loss of the synchronous condenser – Katanga’s subscribed peak power for 2012 budget was 128 MW – load shed down to 93 MW –
Slide 19: Katanga expansion
Katanga expansion First cathode from new SX/EW plant on 17 December 2012 Annualised 200 ktpa run rate expected by December 2013 – Sulphide receiving – April 2013 – EW 2 – May 2013 – Roaster – September 2013 – Oxide receiving / CCD’s – September 2013 – KTC flow changes – October 2013 Identical
Slide 20: Katanga – EW1 and EW2
Katanga – EW1 and EW2 EW1 EW2 I 19
Slide 21: Katanga – before and after
Katanga – before and after Before After Copper Cathodes Flotation I 20
Slide 22: Katanga – KTC
Katanga – KTC Flotation, Katanga Mills, Katanga I 21
Slide 23: DRC operations annual production
DRC operations annual production 200 180 155 150 93 91 100 74 55 50 58 87 29 44 64 22 11 16 7 0 2008 2009 2010 2011 2012 2013 Note: Production data rounded to nearest 1,000. Katanga Copper Mutanda Copper I 22
Slide 24: Thank you
Thank you GLENCORE | 23
Slide 25: Agricultural Products and Viterra
Agricultural Products and Viterra Chris Mahoney Director of Agricultural Products I 24
Slide 26: Acquisition and integration of Viterra
Acquisition and integration of Viterra Final regulatory approval from MOFCOM (China) received on 7 December 2012 Transaction closed on 17 December 2012 Moved rapidly to streamline and integrate Viterra – Viterra international marketing offices in Geneva, Hamburg and Barcelona closed – Internat
Slide 27: Sale of various businesses
Sale of various businesses Sale of various Canadian handling assets to Richardson expected to complete in Q1 2013 – Richardson has already received Canadian competition clearance Sale of Agri Products business to Agrium expected to complete in Q2 2013 – Agrium’s competition filing is in progress
Slide 28: Glencore's logistics infrastructure (1/2)
Glencore’s logistics infrastructure (1/2) Grain port facilities, 22 with 5.9m MT storage capacity and normalised annual throughput of c.46m MT Tilbury Dunaújváros Szczecin Muuga Constanza Illychevsk 500k mt 300k mt 1.25M mt 4.0M mt 300k mt 2.5M mt 79k mt 7k mt 50k mt 300k mt 69k mt 220k mt Prince Ru
Slide 29: Glencore's logistics infrastructure (2/2)
Glencore’s logistics infrastructure (2/2) Storage facilities, 274, with cumulative 13.2m MT storage capacity Bulgaria Hungary Poland Romania Russia Ukraine Kazakhstan 2 facilities 4 facilities 5 facilities 10 facilities 11 facilities 38 facilities 3 facilities 64k mt 240k mt 180k mt 337k mt 710k mt
Slide 30: Glencore now has a global processing network
Glencore now has a global processing network Processing facilities Facilities no. Capacity (000 MT) Crushing 12 7,010 Milling 14 1,840 Biofuels 6 830 Malt 7 740 Feed compound 6 340 Pasta 2 250 I 29
Slide 31: Opportunities
Opportunities Transport costs from Mato Grosso to Paranaguá c. Brazil $125 / mt – Equivalent to 45-50% of corn price FOB Paranaguá Mato Grosso Infrastructure – Equivalent to 20-25% of soy price FOB Paranaguá opportunities Peak waiting time at port of Paranaguá Paranaguá – 2011: 20 days – 2012: 4
Slide 32: Ivan Glasenberg, Chief Executive Officer
Ivan Glasenberg Chief Executive Officer I 31
Slide 33: Concluding remarks and outlook
Concluding remarks and outlook Marketing Robust performance in 2012 Future performance expected to be driven by organic growth in industrial assets and integration of Viterra and Xstrata Industrial Tight cost control and diversification mitigated commodity price weakness and led to overall str
Slide 34: Q&A
Q&A GLENCORE | 33
Slide 35: Appendix
Appendix GLENCORE | 34
Slide 36: 2012 relative operating performance – in controlled industrial activities
2012 relative operating performance – in controlled industrial activities Absolute EBITDA change 2012 vs 2011 EBITDA margin change 2012 vs 2011 (%) (bps) (3%) (150) (900) (1,000) (32%) (35%) (1,420) (36%) Glencore (excluding Peer 1 Peer 2 Peer 3 Glencore (excluding Peer 1 Peer 2 Peer 3 stake in Xstr