Rio Tinto Plc · LSE:RIO
Rio Tinto — H1 2024 Earnings Presentation
42 slides from Rio Tinto's earnings presentation, Jul 31, 2024
Slide 1: Notice to ASX: 2024 Half Year Results Presentation
Notice to ASX 2024 Half Year Results Presentation 31 July 2024 The Rio Tinto 2024 half year results presentation will be given today at 11:30am (AEST) / 2.30am (BST) by Rio Tinto Chief Executive, Jakob Stausholm and Chief Financial Officer, Peter Cunningham. The presentation slides are attached and
Slide 2: Notice to ASX: Contacts
Notice to ASX 2/2 Contacts Please direct all enquiries to media.enquiries@riotinto.com Media Relations, Media Relations, Media Relations, United Kingdom Australia Americas Matthew Klar Matt Chambers Simon Letendre M +44 7796 630 637 M +61 433 525 739 M +1 514 796 4973 David Outhwaite Jesse Riseborou
Slide 3: 2024 Half Year Results
For personal use only 2024 Half Year Results 31 July 2024 Oyu Tolgoi, Mongolia
Slide 4: Cautionary and supporting statements
Cautionary and supporting statements For personal use only This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (together with their subsidiaries, forward-looking statements. These forward-looking statements speak only as of the date of this report. Rio Tinto “Rio Tinto”). By a
Slide 5: Cautionary and supporting statements (cont.)
Cautionary and supporting statements (cont.) For personal use only Simandou - Production Targets The estimated annualised capacity of approximately 60 million dry tonnes per annum (27 million dry tonnes Rio Tinto Share) iron ore for the Simandou life of mine schedule referenced in slides 15,16 and 1
Slide 6: Jakob Stausholm, Chief Executive
Jakob Stausholm For personal use only Chief Executive Weipa, Queensland, Australia
Slide 7: Growing through focus on our four objectives
Growing through focus on our four objectives For personal use only AL LICE CI NC O E S Best Impeccable operator ESG Excel in development Simandou rail loop, Guinea Care Courage Curiosity Finding better ways to provide the materials the world needs ©2024, Rio Tinto, All Rights Reserved 5
Slide 8: Continued operational progress and profitably growing
Continued operational progress and profitably growing1 For personal use only Production (CuEq)2 Underlying ROCE 2% ~3% 19% Year-on-year change CAGR from 2024 – 20283 5-year average4 of 29% Underlying earnings Underlying EBITDA $5.8 bn $12.1 bn (42% margin) 1% year-on-year 3% year-on-year Operating c
Slide 9: Peter Cunningham, Chief Financial Officer
Peter Cunningham For personal use only Chief Financial Officer Amrun, Queensland, Australia
Slide 10: Consistent financial performance
Consistent financial performance $bn, except where stated H1 2024 H1 2023 Comparison For personal use only Consolidated sales revenue 26.8 26.7 +1% Underlying EBITDA 12.1 11.7 +3% Underlying earnings 5.8 5.7 +1% Net earnings 5.8 5.1 +14% Underlying ROCE 19% 20% -1% Cash flow from operations 7.1 7.0
Slide 11: Resilient pricing for our commodities
Resilient pricing for our commodities For personal use only Iron ore1 CFR index -3% (1H24 vs 1H23) Copper LME2 +4% (1H24 vs 1H23) Aluminium LME2 +1% (1H24 vs 1H23) 250 500 4,000 900 200 3,500 750 450 3,000 600 150 400 2,500 450 100 2,000 300 350 50 1,500 150 0 300 1,000 0 Jan-21 Jul-21 Jan-22 Jul-22
Slide 12: Stable pricing with active cost management delivering strong EBITDA generation
Stable pricing with active cost management delivering strong EBITDA generation For personal use only Underlying EBITDA $bn External $0 bn Controllables +$0.4 bn 12.1 11.7 11.7 0.4 0.2 0.2 0.0 0.1 0.2 0.4 0.3 Copper +0.3 Energy +0.1 Iron ore -0.4 Simandou +0.3 Iron ore -0.3 Kennecott Kitimat +0.1 sme
Slide 13: Solid cash generation, some impact from working capital
Solid cash generation, some impact from working capital For personal use only $bn, except where stated H1 2024 H1 2023 Comparison Working capital outflow of $0.7bn in H1 2024: • Draw down of royalties and taxes payable as Underlying EBITDA 12.1 11.7 +3% prices fell in late 2023 Tax paid (2.6) (2.4)
Slide 14: Moving forward with improvement at most assets
Moving forward with improvement at most assets For personal use only Iron Ore Aluminium Copper Minerals $bn, Robust results Strengthening our core business Ramp-up at Oyu Tolgoi Lower production rates and except where stated underground on track challenging market conditions vs H1 23 vs H1 23 vs H1
Slide 15: We are deepening the maturity of SPS at existing sites
We are deepening the maturity of SPS at existing sites For personal use only SPS deployment SPS case study: Amrun mine3 Now at 26 sites Asset Management Uplift Program Weipa, Tom Price and Robe Valley achieved best Reducing scheduled losses Increasing plant feed rate4 demonstrated throughput rates1
Slide 16: Consistent capital allocation, balancing essential capex with shareholder returns and growth
Consistent capital allocation, balancing essential capex with shareholder returns and growth For personal use only 01 Essential capex1 ($bn) Integrity, Replacement, Decarbonisation 02 Interim ordinary dividends 40-60% of underlying earnings 03 Iterative cycle of… on average through the cycle2 6.1 Fu
Slide 17: Simandou high grade iron ore project advancing at pace
Simandou high grade iron ore project advancing at pace For personal use only Construction progress Project milestones 2024 2025 2026 2027 2028 Rail tunnel Camps Mine Ramp-up to Early crusher First ore (mine gate) 60Mtpa 1 complete Simfer spur line Rail completion Bridge piers Port car dumper Main ra
Slide 18: Simandou expenditure summary
Simandou expenditure summary For personal use only Simfer Rio Tinto Rio Tinto share ($bn) share ($bn) spent to date ($bn) Total $0.4bn (Rio Tinto share) spent in H1 2024 Mine and TSVs, owned and operated by Simfer: 60Mtpa1 mine at Simandou South Payments received from our Simfer JV partner $5.1 $2.7
Slide 19: Consistent delivery of attractive dividends
Consistent delivery of attractive dividends For personal use only Shareholder returns1 of 40-60% of underlying $2.9bn of dividends declared for H1 2024 earnings on average through the cycle 50% payout, in line with our practice and with the Payout ratio (%) intention that the balance between interim
Slide 20: Jakob Stausholm, Chief Executive
Jakob Stausholm For personal use only Chief Executive Rincon lithium project, Argentina
Slide 21: Our growth is accelerating, from value accretive options
Our growth is accelerating, from value accretive options For personal use only Rio Tinto CuEq1 production Step-change in production, particularly from our Existing assets aluminium and copper businesses, while Pilbara Iron Pilbara Iron Ore Ore remains resilient Bauxite We are deepening the maturity
Slide 22: Our production is at an inflection point
Our production is at an inflection point We have stabilised our Pilbara operations and we are now seeing growth across our business For personal use only Aluminium Copper Minerals Step change in performance at our assets Oyu Tolgoi underground approaching First lithium production from key project mi
Slide 23: We are targeting value accretive decarbonisation
We are targeting value accretive decarbonisation1 On track to meet industry-leading 2030 targets For personal use only Repowering our assets to transition to a sustainable 2.2GW PPAs for Boyne Pilbara renewables NZAS future secured 140MW Khangela Emoyeni wind farm future Bringing online new renewabl
Slide 24: Continued operational progress, solutions, significant growth
For personal use only Continued operational Finding solutions to Significant growth progress complex challenges creating value Weipa Simandou Oyu Tolgoi ©2024, Rio Tinto, All Rights Reserved 22
Slide 25: Rio Tinto
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Slide 26: Other financials
For personal use only Other financials ©2024, Rio Tinto, All Rights Reserved 24
Slide 27: Balance sheet remains strong
Balance sheet remains strong For personal use only $bn June 2024 Dec 2023 Disciplined approach is unchanged, we intend to maintain it throughout the cycle Net cash generated from operating activities 7.1 15.22 • Balance sheet strength is an asset. Offers resilience and creates optionality Share of c
Slide 28: Simplified earnings by Business Unit for H1 2024
Simplified earnings by Business Unit for H1 2024 For personal use only Atlantic Aluminium Pacific Aluminium Copper Pilbara Sales volume 1,125kt 530kt 361kt5 136.2Mt8 Average benchmark price $2,358/t $2,358/t 412c/lb6 $106.1/dmt9 Premiums, provisional pricing, by-product sales, product mix, other $46
Slide 29: Iron Ore
Iron Ore For personal use only Financial metrics H1 H1 2023 2024 Shipments3 2024 H1 ($bn) 2024 comparison guidance (Mt, 100% basis) guidance 2024 2023 2022 2021 2020 2019 Segmental revenue 15.2 -3% Pilbara Blend 91.3 201.5 203.9 202.9 232.7 228.1 EBITDA 8.8 -10% Margin (FOB)3 67% -2pp Robe Valley 16
Slide 30: Aluminium
Aluminium For personal use only Financial metrics H1 H1 2023 Production 2024 H1 ($bn) 2024 comparison (Mt, Rio Tinto share) guidance 2024 2023 2022 2021 2020 2019 Segmental revenue 6.5 4% Bauxite 53 – 56* 28.1 54.6 54.6 54.3 56.1 55.1 EBITDA 1.6 38% Alumina 7.0 – 7.3 3.5 7.5 7.5 7.9 8.0 7.7 Margin (
Slide 31: Composition of alumina and aluminium production costs
Composition of alumina and aluminium production costs For personal use only Production cash costs Input Inventory FY24 Annual Cost H1 2023 H2 2023 H1 2024 Alumina refining Costs (Index price) Flow3 Sensitivity 100% 100% 100% 100% 100% Caustic Soda1 ($/t) 424 369 376 3 – 4 months $11m per $10/t 14% 1
Slide 32: Copper
Copper For personal use only Financial metrics H1 H1 2023 2024 Production 2024 H1 ($bn) 2024 comparison guidance (Mt, Rio Tinto share) guidance 2024 2023 2022 2021 2020 2019 Mined copper Segmental revenue 4.4 26% 660 – 720* 327 620 607 602 627 675 (consolidated basis)4 EBITDA 1.8 67% Refined copper
Slide 33: Minerals
Minerals For personal use only Financial metrics H1 2023 Production 2024 H1 ($bn) H1 2024 comparison (Rio Tinto share) guidance 2024 2023 2022 2021 2020 2019 Segmental revenue 2.7 -5% IOC (Mt) 9.8 – 11.5 4.8 9.7 10.3 9.7 10.4 10.5 Borates – B2O3 content ~0.5Mt 246 495 532 488 480 520 (kt) EBITDA 0.7
Slide 34: Modelling EBITDA
Modelling EBITDA Underlying EBITDA sensitivity For personal use only US$m impact on full year Average published price/ 2024 underlying exchange rate for H1 2024 EBITDA of a 10% change in prices/exchange rates Aluminium - US$ per tonne 2,358 1,212 Copper - US cents per pound 412 627 Gold - US$ per tr
Slide 35: Simandou expenditure summary
Simandou expenditure summary H1 2024 Actuals For personal use only $m Cash capital expenditure, 100% Simfer basis (page 59 of HY24 press release) (742) Operating assets as of December 2023 (page 59 of HY24 press release) 738 Simfer (100%) capital expenditure incurred to Cash capital expenditure (PP&
Slide 36: Debt maturity profile
Debt maturity profile At 30 June 20241 For personal use only $m €417m bond with 2.875% coupon matures in December 2024 2,000 No further corporate bond maturities until 2028 1,500 At 30 June weighted average outstanding debt maturity of corporate bonds ~15 years (~11 years for Group debt) 1,000 Liqui
Slide 37: Guidance
For personal use only Guidance ©2024, Rio Tinto, All Rights Reserved 35
Slide 38: Balancing near-term returns to shareholders
Balancing near-term returns to shareholders For personal use only Essential capex 1 Integrity, Replacement, Decarbonisation Further cash Compelling returns to 2 Ordinary dividends shareholders growth 3 Iterative cycle of Debt management ©2024, Rio Tinto, All Rights Reserved 36
Slide 39: Group level financial guidance
Group level financial guidance For personal use only 2024 2025 2026 Share of capital investment Total Group Up to $10bn Up to $10bn Up to $10bn Group Growth Capex Up to $3bn Up to $3bn Up to $3bn Group Sustaining Capex ~$4bn ~$4bn ~$4bn Pilbara Sustaining Capex ~$1.8bn1,2 ~$1.8bn1,2 ~$1.8bn1,2 • Rep
Slide 40: Product group level guidance
Product group level guidance For personal use only 2024 2024 Production Guidance Unit cost guidance Pilbara iron ore 323 – 338Mt1 Pilbara Iron ore ($/tonne)6 $21.75 – $23.5 shipments (100% basis) Copper 660 – 720kt3 Copper C1 (US cents/lb) 140 – 160 Mined Copper (consolidated basis)2 Refined Copper
Slide 41: Common acronyms
Common acronyms $ United States dollar FOB Free On Board Pa Per annum € Euro FY Full Year QAL Queensland Alumina Limited AIFR All Injury Frequency Rate G&A General and Administrative R&D Research and Development For personal use only Al Aluminium GJ Gigajoules RC Refining charge B2O3 Boric oxide GDI
Slide 42: Rio Tinto
RioTinto Ajuo asn seuossad J04