Glencore Plc · LSE:GLEN
Glencore — Investor Day (December 2022)
36 slides from Glencore's investor day presentation, Dec 6, 2022
Slide 1: 2022 Investor Update
2022 Investor Update 6 December 2022
Slide 2: Important Notice Concerning This Document Including Forward Looking Statements
IMPORTANT NOTICE CONCERNING THIS DOCUMENT INCLUDING FORWARD LOOKING STATEMENTS This document contains statements that are, or may be deemed to be, “forward looking statements” which are prospective in nature. These forward looking statements may be identified by the use of forward looking terminolog
Slide 3: Our Investment case
Our Investment case
Slide 4: Investment case: energising today | advancing tomorrow
INVESTMENT CASE energising today | advancing tomorrow Our markets Our business Our value • Underinvested, • Unique position in • Flexible business destocked with strong producing, recycling, model that adapts demand growth sourcing, marketing and quickly to changing distributing the conditions and i
Slide 5: Supplying the energy transition materials critical on the journey to net zero
Supplying the energy transition materials critical on the journey to net zero
Slide 6: Simplifying and aligning our industrial portfolio
SUPPORTING THE JOURNEY TO NET ZERO Simplifying and aligning our industrial portfolio Extensive review of industrial portfolio • Base portfolio aligned around key long-life low-cost future facing assets/regions • Monetisation and recycling of capital back into the business • Improved ESG risk profile
Slide 7: Commodity shortages are looming; significant mine development is lagging
SUPPORTING THE JOURNEY TO NET ZERO Commodity shortages are looming; significant mine development is lagging IEA net zero emissions pathway is but increasing mine supply is and the industry remains wary of short >50Mt of copper by 2030 … challenging given heightened multi-billion dollar investment co
Slide 8: Advancing the next generation of critical minerals
SUPPORTING THE JOURNEY TO NET ZERO Advancing the next generation of critical minerals Long-term copper base portfolio of c.1Mt with >1.0Mt growth optionality • Significant brownfield organic growth optionality in key copper producing districts • Continuing programme to identify/build/manage the capa
Slide 9: Accelerating the circularity of critical minerals
SUPPORTING THE JOURNEY TO NET ZERO Accelerating the circularity of critical minerals Growing our global recycling As a major producer/marketer of battery metals we are seeking footprint in our core and new to accelerate circularity of critical minerals markets – 2022 progress Ni, Co Refining Mining
Slide 10: Supplying the energy needs of today
SUPPORTING THE JOURNEY TO NET ZERO Supplying the energy needs of today With 12 coal mine closures by Our pathway to Net-zero scope 1+2+3 CO2e emissions(1) 2035, we are on track to reduce our Scope 1+2+3 CO2e emissions 2019 2026 2035 2050 by at least 15% by 2026 and by 373Mt -15% -50% Net- 50% by 203
Slide 11: Supplying the energy needs of today
SUPPORTING THE JOURNEY TO NET ZERO Supplying the energy needs of today Abatement is one of our decarbonisation strategy Surat Blue hydrogen project – pre-feasibility pillars Concurrently, we are studying the potential use of the Our CTSCo Carbon Capture and Storage Project achieved Wandoan coal reso
Slide 12: Responsible production
Responsible production
Slide 13: Safety performance
RESPONSIBLE PRODUCTION Safety performance Our ambition is to prevent all fatalities, occupational diseases and injuries at work Our SafeWork initiative supports long-term sustainable change that promotes the elimination of fatalities and serious injuries. We relaunched SafeWork in H1 2021 to address
Slide 14: Production guidance
RESPONSIBLE PRODUCTION Production guidance Key commodities Forecast 2022-2025 Annual average 2023-2025 2022F 2023F 2024F 2025F Gold(koz) 740 Copper(kt) 1060 ±20 1040 ±30 1060 1045 Silver(Moz) 19.2 Cobalt(kt) 45 ±2 38 ±5 60 60 Platinum(koz) 53 Zinc(kt) 945 ±25 950 ±30 950 890 Palladium(koz) 93 Nickel
Slide 15: Katanga update
RESPONSIBLE PRODUCTION Katanga update Operational challenges Additionally, we are accelerating next block, KOV 5A, into 2022 production impacted by: production along with a focus on enhancing shovel and • geotechnical constraints; truck fleet performance and capacities • higher volumes of acid-consu
Slide 16: MACC opportunities
RESPONSIBLE PRODUCTION MACC opportunities Inventory of MACC decarbonisation opportunities doubled again in 2022 Our larger assets are well positioned for Value accretive Scope 1+2 Declining coal volumes lower our sourcing renewable energy abatement opportunities exposure to bulk commodity expected t
Slide 17: Abatement initiatives – active studies/projects across industrial portfolio
RESPONSIBLE PRODUCTION Abatement initiatives – active studies/projects across industrial portfolio Renewable Power Altonorte Australian Coal Boshoek Koniambo Asturiana Purchasing Lomas Bayas South African Coal Lion Nikkelverk Nordenham Antapaccay Rustenburg Kazzinc Pasar Wonderkop Mt Isa Cobar Renew
Slide 18: Responsible portfolio management
Responsible portfolio management
Slide 19: Capital allocation
PORTFOLIO MANAGEMENT Capital allocation OPTIMAL BUSINESS SHAREHOLDER CAPITAL REINVESTMENT DISTRIBUTIONS STRUCTURE Balance sheet strength – Optimising our portfolio Sustainable base distribution optimal balance between debt through divestments / comprising a fixed payout of and equity acquisitions $1
Slide 20: Capital allocation: Optimal capital structure
PORTFOLIO MANAGEMENT Capital allocation: Optimal capital structure 10 Target: optimal leverage Net debt ($ billion) Net debt managed around a $10bn cap with sustainable 15.8 deleveraging (after base distribution) below the cap 16 Temporary periodically returned to shareholders via special cap for M&
Slide 21: Capital allocation: Business reinvestment
PORTFOLIO MANAGEMENT Capital allocation: Business reinvestment Group Industrial capex: 2023-2025 average: $5.6bn p.a. • $1.1bn p.a. metals expansionary • $3.2bn p.a. metals sustaining (inc c.$0.7bn p.a. of deferred stripping) • $1.3bn p.a. energy portfolio(1) • Some meaningful level of capex related
Slide 22: 2023F Mine unit cash costs/margins
PORTFOLIO MANAGEMENT 2023F Mine unit cash costs/margins(1) Copper Zinc Nickel Coal $/lb total cash cost $/lb total cash cost $/lb total cash cost ex-KNS $/t Thermal FOB cash cost 0.92 0.35 4.57 76.7 $0.68/lb ex Au $6.03/lb with Koniambo Elevated 2023F cost position Higher 2023F unit cost mainly Incr
Slide 23: Illustrative 2023F spot annualised cashflows
PORTFOLIO MANAGEMENT Illustrative 2023F spot annualised cashflows(1) Copper Adj.EBITDA Group Adj.EBITDA $5.3bn 904kt Cu @ $2.65/lb margin $28.7 Zinc Adj.EBITDA bn $1.6bn 691kt Zn @ $1.04/lb margin Nickel Adj.EBITDA $1.5bn 112kt Ni @ $5.93/lb margin Illustrative spot FCF $14.6 Coal Adj.EBITDA $16.7bn
Slide 24: Uniquely positioned
Uniquely positioned energising today | advancing tomorrow
Slide 25: Our 2023 priorities
UNIQUELY POSITIONED Our 2023 priorities Efficiency & Safety Climate discipline Our ambition is to prevent all Progressing along our core Operational fatalities, occupational pathways to achieve our diseases and injuries at work climate commitments: Deliver expected operational volumes with disciplin
Slide 26: energising today | advancing tomorrow
UNIQUELY POSITIONED energising today | advancing tomorrow The right strategy The right business model • Sector leading climate ambition • Responsive and flexible business model that to be a net-zero total emissions adapts to the challenges and opportunities of company by 2050(1) the future and custo
Slide 27: Appendix
Appendix
Slide 28: 2023F illustrative spot annualised FCF
APPENDIX 2023F illustrative spot annualised FCF Cu 2023F production (kt) 1040.0 Copper from other depts (kt) -149.0 (1) Net production (kt) 891.0 Group Forecast sales (kt) 904.0 Spot LME Cu (96% payable) (c/lb) 357.0 Unit cash cost guidance (c/lb) -92.0 FY margin (c/lb) 265.0 $bn FY margin ($/t) 584
Slide 29: Capital allocation: Shareholder returns framework
APPENDIX Capital allocation: Shareholder returns framework Predictable minimum shareholder returns grounded on a formulaic base distribution, topped up as the balance sheet allows 1 2 Shareholder returns calculation flowsheet Full-year Half-year Base Top-up results results Distribution Shareholder I
Slide 30: Industrial: copper business unit outlook
APPENDIX Industrial: copper business unit outlook Largely steady base business; modest decline in copper production from other Glencore departments • Ongoing alignment of the copper business around long-life, low-cost assets in South America and Africa: Katanga, Mutanda, Collahuasi, Antamina and Ant
Slide 31: Industrial: cobalt business outlook
APPENDIX Industrial: cobalt business outlook Higher volumes over the period • Production steps up in 2024 as Mutanda and Katanga increase volumes • Stable cobalt by-product volumes from the Murrin Murrin and Nikkelverk nickel assets across the outlook period Production guidance – own source cobalt (
Slide 32: Industrial: zinc business unit outlook
APPENDIX Industrial: zinc business unit outlook Relatively stable outlook, with the 2025 production decline reflecting end of mine life closures • Simpler portfolio – Bolivian, Argentinian and Peruvian(1) assets divested over the last two years • Industrial zinc business now oriented towards larger,
Slide 33: Industrial: nickel business unit outlook
APPENDIX Industrial: nickel business unit outlook Ex-Koniambo production growth over the outlook period reflects commissioning of the Canadian life extension projects • INO production troughs in 2022/2023, before the Canadian extension projects reverse this trend • Major project delivery - Raglan Ph
Slide 34: Industrial: coal business unit outlook
APPENDIX Industrial: coal business unit outlook Stable production outlook – c.21% below 2019 base line • 2022 production heavily constrained by Australian weather, Cerrejón blockades and South African rail logistics • External impacts assumed to be less impactful from 2023, countering portfolio depl
Slide 35: Footnotes
APPENDIX Footnotes Slide 28: Totals may not add due to rounding. (1) Copper spot annualised Adjusted EBITDA calculated basis mid-point of 2023 production guidance on Slide 14 adjusted for copper produced by other departments. Spot copper price as at 1 December 2022, by-products and FX as at 1 Decemb
Slide 36: For more information
APPENDIX For more information 2022 Investor Update 36