Rio Tinto Plc · LSE:RIO
Rio Tinto — Exane BNP Paribas 22nd European CEO Conference (June 2020)
15 slides from Rio Tinto's conference presentation, Jun 9, 2020
Slide 1: Exane BNP Paribas 22nd European CEO conference
Exane BNP Paribas 22nd European CEO conference Jakob Stausholm, CFO 9 June 2020
Slide 2: Cautionary and supporting statements
Cautionary and supporting statements This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (“Rio Tinto”). By accessing/attending this presentation you acknowledge that you have read and understood the following statement. Forward-looking statements This document, including but n
Slide 3: Pioneers in mining and metals producing materials essential to human progress
As pioneers in mining and metals we produce materials essential to human progress Fe Cu Al Ni Li Perform & Transform Perform today Transform for tomorrow Portfolio Performance People Partners 3 ©2020, Rio Tinto, All Rights Reserved
Slide 4: Enhance resilience, strengthen partnerships and continue to adapt
Enhance resilience, strengthen partnerships and continue to adapt Resilience Partnerships Agile Strong balance sheet Access to resources Covid-19 tactical response Disciplined capital allocation Technology and R&D Rio Tinto post Covid-19 Access to markets Risk sharing New approach to growth Value ov
Slide 5: Robust performance
Robust performance 1Q20 2019 2016-2019 All assets are 24% 18% operating ROCE Average ROCE $5-6bn $5.5bn $18bn Capital investment Capital investment Capex for 2020, down from $7bn 73m t $7.6bn $23bn Iron ore shipments, +5% YoY Taxes and royalties paid Taxes and royalties paid 324-334mt $17.2bn $67bn
Slide 6: We generate strong cash flows
We generate strong cash flows Cash flow in $ billion 20.0 Capital allocation framework in action 18.3 15.1 15.8 13.7 14.3 New returns 14.1 policy 11.9 9.2 9.4 9.4 9.7 10.0 7.7 8.5 6.9 7.1 5.8 4.8 3.9 2.1 (8.1) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Operating cash flow Free cash flow
Slide 7: Disciplined allocation of capital
Disciplined allocation of capital Essential 1 sustaining capex Further cash returns to Compelling Ordinary 2 dividends shareholders growth Iterative 3 cycle of Debt management 7 ©2020, Rio Tinto, All Rights Reserved
Slide 8: Growth is all about value: invest in assets and create options through exploration
Growth is all about value: invest in assets and create options through exploration $2.6 billion Quality Margins Returns Development growth capital invested Focus on most promising exploration opportunities $0.6 billion Spent on exploration and evaluation >200 17 countries Opportunities reviewed by 6
Slide 9: Our strong balance sheet
Our strong balance sheet Net debt Balance sheet strength is an asset. $ billion Offers resilience and creates optionality. 14.1 Gearing 7% and net debt to LTM^ EBITDA of 0.17x 12.9 11.3 10.0 $0.2 billion of share buy-backs 9.3 9.3 completed by end of February 2020 8.0 9.6 7.6 5.2 5.6 4.9 3.8 4.9 3.7
Slide 10: Shareholder returns based on a well defined pay-out policy
Shareholder returns based on a well defined pay-out policy Our pay-out ratio has consistently exceeded the policy Final ordinary dividend for 2019 of $3.7 160% billion or 231 US cents per share paid in April 2020 140% Total declared dividend for 2019 of $7.2 120% billion or 443 US cents per share 10
Slide 11: $36bn cash returns since 2016 including $3.9bn paid in 1H 20
$36bn cash returns since 2016 including $3.9bn paid in 1H 2020 $9bn $19bn + $3.7bn Sustaining capex Ordinary and special 2019 final dividend dividends paid paid in April 2020 43% average EBITDA margin1 $50bn3 operating cash flows $9bn $62bn4 $4bn Development capex of cash Buy-backs 28% 18% + $12bn T
Slide 12: Our investment case
Our investment case Our Assets Our Approach Our Performance Long life Sustainability (ESG) 2019 ROCE2 Competitive Operational Excellence $10.4 billion earnings1 24% Expandable + Value over volume = $10.0 billion free cash flow3 23% Sustainable Capital discipline $11.9 billion dividends 27% and share
Slide 13: Appendices
Appendices
Slide 14: Our climate change strategy update
Our climate change strategy update We do not mine coal or extract oil and gas Our targets1 30% reduction in emissions intensity by 2030 from 2018 levels 15% reduction in absolute emissions by 2030 from 2018 levels Our growth, overall, between now and 2030 will be carbon neutral Underpinned by Approx
Slide 15: Modelling EBITDA
Modelling EBITDA Underlying EBITDA sensitivity ($m) impact on FY 2019 underlying 2019 average price / rate EBITDA of 10% price/rate change Copper 273c/lb 350 Aluminium $1,791/t 482 Gold $1,393/oz 54 Iron ore (62% Fe FOB) $85.9/dmt 2,061 A$ 0.70US$ 529 C$ 0.75US$ 199 Oil (Brent) $64/bbl 72 Note: The
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