Glencore Plc · LSE:GLEN
Glencore — Glencore Xstrata — Debt Investor Presentation (May 2013)
27 slides from Glencore's debt investor presentation, May 24, 2013
Slide 1: Fixed Income Investor Update
Fixed Income Investor Update May 2013
Slide 2: Disclaimer
Disclaimer This document comprises written materials for a presentation by Glencore Xstrata plc (“Glencore Xstrata”). This document is an advertisement and not a prospectus or a prospectus equivalent document. This presentation is not intended to and does not constitute, or form part of, any offer,
Slide 3: Table of Contents
Table of Contents 1 Group Highlights 3 2 Merger Update 5 3 Glencore Xstrata Overview 11 4 Glencore Xstrata Pro Forma Financials 21 5 Appendix 25 2
Slide 4: Group Highlights
2 1 Group Highlights 3
Slide 5: Group Highlights
Group Highlights 2 1 • Management team with strong track record of value creation based on ownership mentality • Naturally defensive profile, and most diversified major by commodity and geography • Strong near-term growth from brownfield projects and recent M&A activity • Significant cash flow poten
Slide 6: Merger Update
Merger Update ’ 7
Slide 7: Merger update
Merger update 2 • Clear leadership and reporting lines already in place • Implementation of integration plans under way • Material cost-based synergies identified, incremental to previously announced $500m • Commencement of industrial asset portfolio review • Values and Code of Conduct for combined
Slide 8: Clear leadership and reporting lines in place
Clear leadership and reporting lines in place 2 Experienced management team with a proven track record of value creation Our management structure CEO Ivan Glasenberg CFO Asset Integration Steven Kalmin Advisor Peter Coates Metals & Minerals Energy Agriculture Copper Zinc Aluminium Ferroalloys Nickel
Slide 9: Material synergies to be delivered
Material synergies to be delivered 2 • Previously announced $500m synergies will be comfortably met • $450m marketing optimisation • $50m cost • from Day 1, we will realise – product flow optimisation – transport and logistics savings • Streamlining management adds new dimension • elimination of bur
Slide 10: Material incremental cost-based synergies identified
Material incremental cost-based synergies identified 2 • Duplication above industrial operations • closure of Xstrata corporate headquarters in Zug and London • rationalising the Group’s global Business Unit office network and reduction of management layers • Single head office in Baar, Switzerland
Slide 11: Roadmap for integration
Roadmap for integration 2 • What we have done • finalised detailed planning where possible and practical • CEO and integration team have visited Xstrata’s major assets and met with key operational personnel • each division prepared business plans with clear actions, responsibilities and timelines •
Slide 12: Glencore Xstrata Overview
3 Glencore Xstrata Overview
Slide 13: Glencore Xstrata
Glencore Xstrata 3 At a glance • a leading integrated producer and marketer of commodities, with worldwide activities in the production, refinement, processing, third party procurement, storage and transport of Metals and Agricultural Energy Products those products Minerals Products • more than 90 o
Slide 14: Most diversified major by commodity
Most diversified major by commodity 3 (By 2012 EBIT) BHP: Copper 33% Oil 26% Zinc 15% Copper/Zinc 20% Nickel 1% Iron Ore 54% (2) Coal 25% Coal 3% Oil 5% Corp and other (3%) Marketing metals 17% Marketing energy 5% Marketing agri 5% Corp and other (6%) Rio Tinto: Anglo American (1) Iron Ore 81% Iron
Slide 15: Where we operate
Where we operate 3 More than 90 offices in over 50 countries, over 150 industrial sites and facilities 14
Slide 16: Our products in society
Our products in society 3 Over 90 commodities produced and / or marketed 15
Slide 17: Industry leading production volumes
Industry leading production volumes 3 Export thermal coal production (m MT) Mined copper production (k MT) 91 1,954 #1 1,658 #4 1,271 1,203 46 44 40 38 38 730 724 Glencore Bumi BHP Billiton Siberian Anglo Adaro Codelco Freeport BHP Billiton Glencore Southern Anglo Xstrata American Energy McMoRan Xst
Slide 18: Strong cash flow potential
Strong cash flow potential 3 • Material growth anticipated for 2013-2015 • commissioning of existing organic growth projects • full earnings from recent acquisitions deliver returns, e.g. Viterra and Optimum • full run-rate synergies from merger • Capex expected to decline materially from 2015 • Xst
Slide 19: Principal balance sheet objective remains maintenance of strong BBB/Baa
Principal balance sheet objective remains maintenance of strong BBB/Baa 3 • Committed to maintaining an efficient and flexible balance sheet • strong BBB/Baa provides the optimal balance amongst RoE, cost of debt, access to capital and risk profile • excess capital available for investment or return
Slide 20: Capital-efficient business model
Capital-efficient business model 3 • Application of Glencore’s capital-efficient business model • Glencore Xstrata run by owners for the benefit of all shareholders • maintain flexible but efficient balance sheet – strong BBB/Baa • Marketing remains highly capital efficient • low capex and equity re
Slide 21: How does Glencore find the best investment opportunities?
How does Glencore find the best investment opportunities? 3 • Trusted relationships with over 7,000 suppliers and customers • existing supply and credit relationships • Glencore often first call for any investment opportunities • Marketing activities and relationships provides unique insight • marke
Slide 22: Glencore Xstrata Pro Forma Financials
4 Glencore Xstrata Pro Forma Financials 21
Slide 23: Key financial highlights (pro forma)
Key financial highlights (pro forma) 4 US$ m (1) 2012 2011 % change Revenue 236,466 209,115 13% Adjusted EBITDA (2) (4) 12,892 16,248 (21%) Adjusted EBIT (3) (4) 8,087 11,965 (32%) Net income attributable to equity holders pre significant items 5,538 7,968 (30%) Net income attributable to equity hol
Slide 24: Robust balance sheet (pro forma)
Robust balance sheet (pro forma) (1) 4 • Maintain minimum liquidity headroom of $3 bn, comprising US$ (2) 2012 available committed undrawn credit facilities • Glencore standalone liquidity headroom was approximately Total assets 169.0bn $9bn as of 31 December 2012 • Strong cashflow coverage ratios:
Slide 25: Concluding remarks and outlook
Concluding remarks and outlook 4 Marketing • Robust performance in 2012 • Future performance expected to be driven by organic growth in industrial assets and integration of Viterra and Xstrata Industrial • Tight cost control and diversification mitigated commodity price weakness and led to an overal
Slide 26: Appendix
5 Appendix
Slide 27: Our values
Our values 5 • Entrepreneurialism • Our approach fosters the highest level of professionalism, personal ownership and entrepreneurial spirit in all our employees while never compromising on the safety and well-being of our people. This is important to our success and the superior returns we aim to a
Glencore Xstrata — Debt Investor Presentation (May 2013) on 6ix