Slide 1: Preliminary Results 2015
South America copper Preliminary Results 2015 1 March 2016
Slide 2: Forward looking statements
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 terminology, or the negative thereof such as "plans", "expects
Slide 3: Highlights
Nickel Rim South, Canada Highlights Ivan Glasenberg – Chief Executive Officer
Slide 4: Delivering on early, decisive action
Delivering on early, decisive action Softer 2015 performance in challenging market backdrop • EBITDA(1,2) $8.7bn, -32%; industrial EBITDA $6.0bn, -38%; marketing EBIT(2) $2.5bn, -12% (3) • Net income of $1.3bn • Solid cash flow generation with FFO of $6.6bn and liquidity of $15.2bn at year end Rapid
Slide 5: Sustainability and governance
Sustainability and governance Safety LTIFR(1) 2010 to 2015 • Regrettably 10 fatalities (16 in 2014), 7 at our 5 “Focus 2.74 Assets” • LTIFR 1.32, 16% improvement 2.49 • Exceeded target to improve LTIFR by 50% by 2016 52% reduction • TRIFR 5.06, 13% improvement • 93% employees have completed “SafeWor
Slide 6: Financial performance
Asturiana de Zinc, Spain Financial performance Steven Kalmin – Chief Financial Officer
Slide 7: Proving our balance sheet flexibility
Proving our balance sheet flexibility Softer 2015 performance in challenging market backdrop • EBITDA of $8.7bn, down 32%; EBIT of $2.2bn, down 68% • Marketing EBIT of $2.5bn, down 12% • Net income pre-exceptional items $1.3bn, down 69% • Industrial capex of $5.7bn, down 31% • Funds from operations
Slide 8: Resilient marketing EBIT performance of $2.5bn
Resilient marketing EBIT performance of $2.5bn Adjusted EBIT 2015 ($M) Pleasing full year performance, noting the headwinds encountered in H1. 2,790 Strong H2 performance of $1.4bn reflects marketing’s underlying strength and resilience 2,464 856 • Metals and minerals 461 • Robust performance follow
Slide 9: Continued strong cash generation in Marketing
Continued strong cash generation in Marketing • Despite significantly lower commodity Marketing EBIT ($M) prices over 2015, Marketing delivered a 0 1,000 2,000 3,000 4,000 healthy EBIT of $2.5bn, down 12% y/y • Marketing earnings are generated from the 2008 handling, blending, distribution and optim
Slide 10: Industrial performance impacted by lower prices and production cuts
Industrial performance impacted by lower prices and production cuts Adjusted EBITDA 2015 ($M) Significantly lower commodity prices weighed on earnings as EBITDA fell 38% 9,763 over the year. This impact was partially 213 mitigated by cost savings and favourable movements in producer country FX rates
Slide 11: Continued focus on opex to maximize FCF generation
Continued focus on opex to maximize FCF generation Industrial Adjusted EBITDA 2014 to 2015 ($M) 10,000 2015 9,000 • 37% of the negative price impact offset by cost reductions and favourable FX 8,000 movements 7,000 2,132 Next 12 months 6,000 (146) • Targeting additional $400M of real cost savings/ef
Slide 12: Enhanced cost positions
Enhanced cost positions Copper costs (c/lb)(1) Zinc costs (c/lb)(2) Coal cost ($/t)(3) Nickel costs (c/lb)(4) Spot LME @ 26 Feb Spot LME @ 26 Feb Spot NEWC @ 26 Feb Spot LME @ 26 Feb 213 80 49 385 47 310 295 143 136 40 269 41 41 39 104 27 2014A 2015A 2016E 2014A 2015A 2016E 2014A 2015A 2016E 2014A 2
Slide 13: 2015 balance sheet metrics
2015 balance sheet metrics Net 52.2 • Strong liquidity position with $15.2bn of 49.2 committed available liquidity at year end funding(1) 54.4 47.3 ($bn) 49.8 • Comfortably covers next 3 years’ bond maturities 41.2 • Healthy cashflow coverage ratios: • FFO to Net debt of 25.6% • Net debt to Adjusted
Slide 14: Capex has been further reduced
Capex has been further reduced • 2016E industrial capex cut a further Industrial capex(1) ($M) $300M to $3.5bn; $5.7bn in 2015 • 2016 capex reflects: 8,035 • Slower spend profile/deferral of expansionary projects including: – African copper, Zhairemsky (zinc/lead), certain coal projects • Lower sust
Slide 15: Targeting even lower Net funding and Net debt in 2016/17
Targeting even lower Net funding and Net debt in 2016/17 Debt bridge ($bn) • Material progress on delivery of our Net capital preservation/debt reduction measures funding $49.7 $8.5 • 2016 Net funding and Net debt targets Net reduced by a further $1bn to $32-33bn funding $41.2 and $17-18bn respe
Slide 16: Concluding remarks
Viterra South Australia Concluding remarks Ivan Glasenberg – CEO
Slide 17: We are prepared for current and even lower prices
We are prepared for current and even lower prices • 2016E marketing Adjusted EBIT guidance range unchanged at $2.4 to $2.7bn • Majority of earnings underpinned by logistics activities/services that are less sensitive to prices • Industrial asset cash positioning significantly enhanced • 2016E capex
Slide 18: Q&A
South America copper Q&A