Anglo American Plc · LSE:AAL
Anglo American — H1 2021 Earnings Presentation
64 slides from Anglo American's earnings presentation, Jul 29, 2021
Slide 1: 2021 Interim Results
2021 Int 29 July 2021 Anglo American
Slide 2: Cautionary statement
Cautionary statement Disclaimer: This presentation has been prepared by Anglo American ple (‘Anglo American’) and comprises the written materials/slides for a presentation concerning Anglo American. By attending this presentation and/or reviewing the slides you agree to be bound by the following con
Slide 3: H1 2021 results agenda
H1 2021 results agenda H1 2021 Overview and Look Ahead Mark Cutifani The Numbers Stephen Pearce Positioned for a Sustainable Future Mark Cutifani Anglo American
Slide 4: Record first half earnings and ROCE
Record first half earnings and ROCE Production’ EBITDA Mining EBITDA margin? “ 10% Unit cost‘ $12.1bn Shareholder returns 61% ROCE® “A 15% Up 6% on flat FX $4.1bn 49%
Slide 5: SHE performance — focus on continuing improvement
SHE performance — focus on continuing improvement Safety Health Environment — Group TRCFR®” [ij Fatalities® Occupational health - new cases®® 111 96 101 39 30 8 2016 = 2017, 2018 = 2019 2020_-—«H12021 2016 2017, 2018 = 2019 = .2020_-—«H12021 Elimination of Fatalities Taskforce Elimination of Hazards
Slide 6: Driving a healthy environment & thriving communities
Driving a healthy environment & thriving communities Energy GHG emissions Social Way Compliance mGJ 106 97 84 87 81 ~84 m4 | | | ! ' i 2016 2017 2018 2019 2020 May 2021 Improvements reflect efficiency gains & early technology steps despite higher production. Covid recovery is patchy. Efficiencies re
Slide 7: 'WeCare': Covid and the third wave
‘WeCare’: Covid and the third wave Responsible, comprehensive & holistic appro to protecting our workforce & host communities and our oper Robust operating protocols & controls Rigorous testing approach Mental health & gender-based violence support Active support to drive vaccine uptake Anglo Americ
Slide 8: Substantial contributions benefit all stakeholders
Substantial contributions benefit all stakeholders $100m special endowment to the Anglo American Foundation $25.7bn 2020 tax & economic contribution MM Toxespaid'? lll Wages &related payments |) Corporate social investment Procurement Ml Capital investment Anglo American
Slide 9: Operational performance - recovery continues
Operational performance - recovery continues Diamonds Rh Pada A 77 78 } Ir Pt ) iridium plgdnten 195.1 Recovery well established Continued strong production Solid mining performance Record iron ore margins Solid margins Competitive operating costs ACP performing well Moranbah restarted Supportive lo
Slide 10: Leading competitive position
Leading competitive position FY2020 average quality adjusted cost curve position’ Improved from 49% (in 201 3) seneeeenenenmennneeeaeeeeees 46% ase eeeeeees 33% 28% With the journey underpinned by... mine reconfiguration operating efficiencies cost restructuring, and quality focus...for product prem
Slide 11: The Numbers
. The Numbers Stephen Pearce ad Anglo American
Slide 12: H1 2021 financial results
H1 2021 financial results EBITDA? EPS? Net debt: EBITDA? $12.1bn Unit cost‘ $4.30/sh Dividends & buyback O.1x Free cash flow!® “A 15% Up 6% on flat FX $3.31/sh $6.2bn
Slide 13: Strong margins drive record EBITDA
Strong margins drive record EBITDA Diamonds $0.6bn 42% mining EBITDA margin? PGMs $4.4bn 71% mining EBITDA margin? Anglo American 13
Slide 14: Strong pricing & operational recovery drive earnings
Strong pricing & operational recovery drive earnings EBITDA2 $bn == ™ _ 11.5 H1 2020 Price'8 Currency Covid ACP recovery Cost& Other H1 2021 &CPI'? recovery volume? Anglo American
Slide 15: Cyclical inflationary headwinds driven by strong prices
Cyclical inflationary headwinds driven by strong prices H1 2021 unit cost performance* H2 unit cost outlook Producer country FX headwinds Input costs expected to increase further Partly offset by higher expected volumes FX CPI Input costs Volumes Maintenance Other?! H12021 Anglo American 6
Slide 16: Lower capex impacted by Covid
Lower capex impacted by Covid Capex?2 $bn 5.5-6.0 (previously 5.7-6.2) 1.9-2.4 H1 non-critical works impacted by (previously 2.0-2.5) Covid delays & supply chain disruption Inflation & FX impacts expected during H2 Growth : =O ~$0.2bn reduction to full year guidance (previously ~3.7) Sustaining H1 2
Slide 17: Strong cash generation drives robust balance sheet
Strong cash generation drives robust balance sheet Net debt $bn $3.6bn reduction in net debt 5.6 LJ 5.2 5% gearing [| Supporting disciplined, 2.0 value-added growth Working capital release expected in H2 2021 & 2022 2020 Growth Working Cash H1 2021 capex22 capital generation Anglo American 7
Slide 18: Healthy dividend pay-out with additional returns
Healthy dividend pay-out with additional returns 331 c¢/sh 80 c/sh 171 c/sh H1 2021 Anglo American $1.0bn Special dividend $2.1bn Base dividend 40% of underlying earnings $10.3bn Returned since 2017 71% H1 2021 payout ratio 18
Slide 19: Transparent tax paid in host countries builds trust
Transparent tax paid in host countries builds trust _. .. ¥ Paid.in host country Cod ’ “AUstralia/ Asia Om South Africa v v $2,000m Anglo American 19
Slide 20: Balanced capital allocation framework
Balanced capital allocation framework H1 2021 allocation of capital $6.2bn Sustaining attributable free cash flow!> $2.1bn H1 2021 dividend at 40% of underlying earnings Balance sheet flexibility Future project Portfolio Additional options upgrade shareholder returns Growth capex’? ($0.8bn) & additi
Slide 21: Improvement initiatives delayed to 2023 by Covid
Improvement initiatives delayed to 2023 by Covid H1 2021 delivery vs 2017 $1.1bn $0.2bn $0.9bn Operating Technology Delivered Model & P101 & Innovation improvement2> Anglo American $3-4bn Projects: 2022-2023 Quellaveco Marine Diamonds Namibia Technology & Innovation: 2020-23 Y Predictive Maintenance
Slide 22: Value-adding, future-enabling growth
Value-adding, future-enabling growth >90% Growth capex allocated to future-enabling products Cu Eq production’ +25% bo 245 +35% Current portfolio ~2023 ~2025 ~2030! Anglo American 2
Slide 23: Balanced, disciplined and sustainable approach
Balanced, disciplined and sustainable approach Cash returns Attractive growth Growth capex $10.3bn Dividends & buybacks since 2017 Resilient balance sheet +20% Production growth by ~2023' Strong margin >90% Focused on future-enabling products Remuneration integrates ESG <O.1x H1 2021 Net debt:EBITDA
Slide 24: Simple conversion of existing divider. Looks a bit old fashioned now I think
Simple conversion of existing divider. Looks a bit old fashioned now I think compared to the rest of the fresh, modern style
Slide 25: Driving towards a sustainable future
Driving towards a sustainable future Greener World Electrified World Consumer World Cu Eq production’ ‘a ~85% Future @ enabling 9 , Nickel & ; High quality — Diamonds Copper PGMs manganese Crop nutrients iron ore Met coal Thermal coal Transition Exit announced enabling or complete Anglo American *
Slide 26: Ahead of schedule on thermal coal exit
Ahead of schedule on thermal coal exit Thungela demerger delivered © South African thermal coal operations Y Transparency & accountability preserved Y Set up for responsible success ¥ Value unlocked for shareholders Cerrejon exit Colombian thermal coal mine Y Sale announced - subject to regulatory a
Slide 27: Positioning towards future-enabling products
Positioning towards future-enabling products vy Ontrack for 2022 delivery despite Covid challenges * Pre-stripping commenced * Processing plant - good progress + Water infrastructure well progressed * 100% renewable electricity secured v FY 2021 capex at lower end of $0.8-1.0bn24 (ourshare) yv ~10%
Slide 28: Positioning towards future-enabling products: Woodsmith
Positioning towards future-enabling products Woodsmith Greenfield crop nutrients project y Construction continues to plan - $0.3bn capex in H1 2021 * Good progress on conveyor tunnel ~16km complete * Shaft boring commenced in service shaft v FY 2021 capex ~$0.5bn * Technical review confirms project
Slide 29: FutureSmart Mining and a healthy environment
FutureSmart Mining™ ..and a healthy environment Technology & Digitalisation Susta ee Carbon neutral operations by 204 8 sites carbon neutral by 203027 2030 targets'® GHG Energy W emissions Vv 30% usage Vv 30% abst Anglo American
Slide 30: Technical innovation unlocks value & sustainability benefits
Technical innovation unlocks value & sustainability benefits Hydraulic Dry Stack Anglo American 80
Slide 31: Hydrogen truck well progressed
Hydrogen truck well progressed \ a Hydrogen production & refuelling systems Final testing of power electronics in US = a" Final testing of 2MW hybrid fuel cell & battery power module in US Hydrogen storage rack testing & commissioning in Germany Anglo American 31
Slide 32: Continuing the evolution of our customer offering
Continuing the evolution of our customer offering Mining Company Metals & Minerals Company Materials Solutions Provider Traditional model of extract and sell on market Our Business Modelis aligned with evolving customers’ needs Customer offering in new profit pools along value chain Anglo American 3
Slide 33: Purpose — re-imagining mining to improve people's lives
Purpose — ‘re-imagining mining to improve people’s lives’ Effectiveness Efficiency Sustainability >] Ox 1 5-2 Ox 7 Pillars of Value Free Cash Flow”® ROCE® embedded H1 2021 39% 49% On track Anglo American 88
Slide 34: Strong cost position
Strong cost position +35% long term growth! Anglo American Differentiated capabilities Technology-led Sustainability leader Sustainable returns $3-4bn EBITDA Improvement | ¢ Disciplined capital allocation 6 34
Slide 35: Footnotes
Footnotes ON 10. 11. 12. Copper equivalent production is calculated using long-term consensus parameters. Excludes domestic thermal coal production. Includes assets sold, closed or placed on care and maintenance. H1 2021 copper equivalent production is normalisedto reflect the demerger of the South
Slide 36: Anglo American
AngloAmerican
Slide 37: Simplified earnings & guidance
Simplified earnings & guidance
Slide 38: H1 2021 simplified earnings by BU
H1 2021 simplified earnings by BU $m (unless stated) (Diomonas) Copper PGMs Iron Ore! Met Coal Nickel Other? Total Sales volume (mined share) 19.2Mct® 305kt 1,675koz* 30.7Mt 6.0MtS 20.0kt Average benchmark price n/a $9,105/te n/a $192/t $127/7 $17,483/% Product premium/discount per unit n/a n/a n/a
Slide 39: H1 2021 simplified earnings by BU - notes
H1 2021 simplified earnings by BU - notes PGMs basket price Iron Ore realised price Met Coal blended price Own mined Realised PGMs basket price Volume Revenue lronore KumbaMinas-Rio Marketprice Volume Platinum $1,172/0z_722koz = $846m Market price2? $192/ $183/t $209/t HCC $132/t 4.7Mt Palladium $2,
Slide 40: Guidance summary
Guidance summary Earnings Capex' Other Volumes See slide 41-42 20211 $5.5-6.0bn Quellaveco copper project (previously $5.7-6.2bn) Unit costs See slide 43 Growth $1.9-2.4bn + 2021 capex*: Expected at lower end of range: (1 jiously $2.0-2.5bn) 0, -" + = _ $3.03.2bn Includes Woodsmith abe 100% $1.3-1.6
Slide 41: Production outlook
Production outlook Units 2019 2020 H12021 2021F 2022F 2023F Diamonds" Mct 31 25 15 32-33 30-33 30-33 Copper? kt 638 647 330 650-680 680-790 890-1,000 Platinum Group Metals* Moz 44 3.8 2.1 4.2-4.4 4.2-4.6 4.2-4.6 7 65.5-68.5 66.5-69.5 Iron ore# Mt 66 61 32 64.5-66.5 (previously 65-68) (previously 66-
Slide 42: Production outlook — supplementary guidance
Production outlook — supplementary guidance Units 2019 2020 H1 2021 2021F 2022F 2023F Chile: 580-640 Chile: 590-650 2 )- Copper kt 638 647 330 650-680 peru: 100-150 Peru: 300-350 Pt: 1.8 Pt: 1.9-2.1 Pt: 1.9-2.1 Platinum Group Metals - M&C by metal? Moz 44 Pd: 1.2 Pd: 1.4-1.5 Pd: 1.4-1.5 Other: 0.8 O
Slide 43: Unit costs performance by Business Unit
Unit costs performance by Business Unit De Beers (US$/ct)' Copper (C1 USc/Ib)? PGMs (US$/PGM oz)? Previously Previously ~55 ~700 713 866 ~870 2020 H1 2021 2021F 2020 H1 2021 2021F 2020 H1 2021 2021F Iron Ore (FOB US$/t)* Met Coal (US$/t)5 Nickel (C1 USc/Ib)° Previously 29 Previously Tit 2020 H1 2021
Slide 44: Earnings sensitivities
Earnings sensitivities Impact of 10% Sensitivity Analysis - H1 2021! change in price / FX Commodity / Currency 30 June spot Average realised EBITDA ($m) Copper (c/Ib)* 426 460 270 Platinum ($/oz) 1,059 1,170 91 Palladium ($/oz) 2,707 2,641 154 Rhodium ($/oz) 20,100 24,377 237 Iron Ore ($/t) 218° 210
Slide 45: High-returning growth options and business improvement drive near-term capex
High-returning growth options and business improvement drive near-term capex Capex’ ($bn) Woodsmith Woodsmith ~$0.5bn capex in 2021! 1.4-1.9 Growth | — 37 1.52.0) Collahuasi desal? ~$0.6bn2 Collahuasi desalination plant Lifex Lifex: Venetia UG, Aquila, Kolomela =O) Baseline + sustaining? Lifex Growi
Slide 46: Life extensions sustain high quality production
Life extensions sustain high quality production Major components of lifex' ($bn) Kolomela (Iron Ore) ~0.6 J Venetia (Diamonds) Aquila (Met Coal) ed Mototolo (PGMs) 2021F 2022F 2023F Lifex projects - subject to disciplined capital allocation framework Capex Volume From LOM extension Returns Venetia U
Slide 47: Margin accretive projects drive growth capex
Margin accretive projects drive growth capex Major components of growth capex' ($bn) +0.5 Woodsmith 1.5-2.0 p.a. 14-19 “~ Namibia (Diamonds) | -01 | Sishen (Iron Ore) Quellaveco (Copper) J Collahuasi Phase 1 (Copper) Mogalakwena (PGMs) une Ie oc Technology & innovation 2021F 2022F 1. Cash expenditur
Slide 48: Attractive greenfield and brownfield options
Attractive greenfield and brownfield options Long life greenfields and fast returning brownfields Capex Volume From! Returns Quellaveco (Copper) $2.7bn to $2.8bn2 +300ktpa2 2022 ~4yearpayback >15%IRR >50% margin Marine Namibia (Diamonds) ~$0.2bn5 +0.5Mctpas 2022 ~3 year payback >25% IRR >60% margin
Slide 49: Technology & innovation will transform the physical footprint of mining
Technology & innovation will transform the physical footprint of mining $0.2-0.5bn pa technology capex to more precisely target metal & mineral with less water, waste & energy Initiative Application Impact Progress Bulk ore sorting Copper, PGMs & Nickel Deliver improved feed grade to plants through
Slide 50: Quellaveco financial modelling
Quellaveco financial modelling Ownership Anglo American 60%, Mitsubishi 40% Fully consolidated with a 40% minority interest Accounting treatment 3 Shareholder loans from minority shareholder consolidated in Anglo American net debt Project capex (nominal)! $5.3-5.5 billion (100% basis - Anglo America
Slide 51: Quellaveco accounting
Quellaveco accounting Anglo American consolidates 100% of Quellaveco’s P&L and Balance Sheet Mitsubishi's 40% share is shown as a non-controlling interest After the initial $0.8bn equity injection by Mitsubishi, the project is now funded 60:40 through shareholder debt Group net debt by the end of th
Slide 52: Anglo American
AngloAmerican
Slide 53: Strong liquidity & limited near-term debt maturities
Strong liquidity & limited near-term debt maturities Liquidity’ Debt repayments ($bn)' $19.2bn $10.9bn cash +$8.3bn undrawn committed facilities Majority of cash held centrally in US dollars Investment grade credit ratings No plc financial covenants in debt facilities 1, At30June 2021 Anglo American
Slide 54: Simple conversion of existing divider. Looks a bit old fashioned now I think
Simple conversion of existing divider. Looks a bit old fashioned now I think compared to the rest of the fresh, modern style
Slide 55: Diamonds - strong demand recovery
Diamonds - strong demand recovery Average Realised Underlying Mining Production’ Sales (Cons.)? price index price® Unit cost* EBITDA margin® Capex H1 2021 15.4Mct 19.2Mct 109 $135/ct $59/ct $610m 42% $205m vs. H1 2020 w 37% wD 124% 0%? ® 13% Vv 5% n/a \ 7pp ® 29% Underlying EBITDA ($m) 610 590 5 —4—
Slide 56: Copper - strong production & record prices
Copper - strong production & record prices Realised Underlying Mining Production Sales! price’ Unit cost? EBITDA margin® Capex* H1 2021 330kt 305kt 460c/Ib 116c/Ib $1,935m 66% $768m vs. H1 2020 a” 5% wv 4% ® 84% wD 8% ® 174% 4 21pp a” 5% Underlying EBITDA ($m) 1,935 (78) a -w- 1,905 en 5 706 H1 2020
Slide 57: PGMs - record margins reflect strong pricing & recovery
PGMs - record margins reflect strong pricing & recovery Realised Underlying Mining Production’ Sales? basket price2 Unit cost® EBITDA margin* Capex H1 2021 2,079koz 2,568koz $2,884/PGM oz $866/PGM oz $4,383m 71% $363m vs. H1 2020 wD 28% ® 109% w 47% ® 15% ® 619% ® 44pp ® 82% Underlying EBITDA ($m) i
Slide 58: Iron Ore Total - strong prices and record margins
lron Ore Total - strong prices and record margins Realised price Unit cost Underlying Mining Production’ Sales! (FOB)2 (FOB)! EBITDA® margin Capex H1 2021 31.9Mt 30.7Mt $210/t $33/t $4,910m 70% $278m vs. H1 2020 ® 3% Vv 3% ® 133% * 32% ® 169% @ 14pp * 18% Underlying EBITDA ($m) 5,246 a= -S- =e 5) a
Slide 59: Kumba (Iron Ore) - record margins
Kumba (Iron Ore) - record margins Realised price Unit cost Underlying Mining Production’ Sales! (FOB)2 (FOB)! EBITDA® margin Capex H1 2021 20.4Mt 19.6Mt $216/t $40/t $3,033m 69% $210m vs. H1 2020 a 12% ® 3% ® 137% * 38% ® 195% @ 15pp ® 21% Underlying EBITDA ($m) 36) — 3033 =p is 2 _gy 2,290 1,028 H1
Slide 60: Minas-Rio (Iron Ore) - strong prices for premium products
Minas-Rio (Iron Ore) - strong prices for premium products Realised price Unit cost Underlying Mining Production’ Sales! (FOB)! (FOB)! EBITDA2 margin Capex H1 2021 11.5Mt 11.1Mt $200/t $22/t $1,877m 73% $68m vs. H1 2020 Vv 9% Vv 13% ® 127% ® 16% ® 135% ® 14pp aw 11% Underlying EBITDA ($m) 1,999 i —e)
Slide 61: Metallurgical coal - improvement expected in H2
Metallurgical coal - improvement expected in H2 Realised Underlying Mining Production’ Sales! price? Unit cost® EBITDA‘ margin Capex H1 2021 6.2Mt 6.0Mt $115/t $124/t $(94)m (13)% $257m vs. H1 2020 VY 20% VY 23% V 4% + 28% nm V (12)pp Vv 10% Underlying EBITDA ($m) (10) (101) (94) (100) (10) ie H1 20
Slide 62: Nickel — consistent performance
Nickel — consistent performance Realised Underlying Mining Production’ Sales! price C1 unit cost EBITDA margin Capex H1 2021 20.7kt 20.0kt 721c/Ib 350c/Ib $135m2 41% $10m vs. H1 2020 V 5% V 2% 44% P4% 110% + 13pp V17% Underlying EBITDA ($m) ro! 177 (23) (19) 135 108 64 H1 2020 Price FX Inflation Cos
Slide 63: Thermal Coal - recovering demand
Thermal Coal - recovering demand Export prod. Sales FOB price* Unit cost® Underlying EBITDA SAC SA2/ Col SA®/ Col SA/Col SA/Col SA°/ Col apex H1 20211 5.7Mt/3.6Mt 5.3Mt/3.4Mt $77/t/ $65/t $46/t/ $34/t $101m/$87m $81m vs.H1 2020 V27% / 430% 26% /46% 426% / 441% 418% /V3% 405% / 569% V8% Underlying EB
Slide 64: Simple conversion of existing divider. Looks a bit old fashioned now I think
Simple conversion of existing divider. Looks a bit old fashioned now I think compared to the rest of the fresh, modern style