Rio Tinto Plc · LSE:RIO
Rio Tinto — BMO Global Metals & Mining Conference 2018
16 slides from Rio Tinto's conference presentation, Feb 26, 2018
Slide 1: Delivering superior returns
Delivering superior returns Chris Lynch, chief financial officer BMO Global Metals & Mining Conference 26 February 2018
Slide 2: Cautionary statements
2 Cautionary 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 not limited to
Slide 3: Supporting statements
3 Supporting statements Ore Reserves (slide 15) Reserve grade for Oyu Tolgoi Underground – Hugo Dummett North and Hugo Dummett North Extension. Probable Ore Reserves for Hugo Dummett North and Hugo Dummett North Extension (499 Mt at 1.66% Cu, 0.35g/t Au) were released to the market in the 2016 Rio T
Slide 4: Our strategy is delivering
4 Our strategy is delivering Cash returns to shareholders of $9.7 billion declared for 2017 - Highest ever full year dividend of $5.2 billion (290 US cents per share) - Additional share buy-back of $1.0 billion to be completed in 2018 EBITDA of $18.6 billion, margin of 44% Reshaping the portfo
Slide 5: Strong results delivered in 2017
5 Strong results delivered in 2017 Robust financial performance Disciplined capital allocation Positioning for the long-term EBITDA of $18.6 billion Full year 2017 dividend of $5.2 billion Silvergrass iron ore mine commissioned in Q4 2017 Operating cash flow of $13.9 billion Share buy-backs declared
Slide 6: Safety and health come first
6 Safety and health come first Safety fatality at Kennecott Operations and Health Continuing history of improvement fatality in Pilbara Exploration in October Focusing on fatality elimination – Rio Tinto ICMM (23 companies) 2.78 1.5 million CRM verifications in 2017 Reducing injuries – Targeted haza
Slide 7: Superior returns from world-class assets
7 Superior returns from world-class assets Iron Ore Aluminium Copper & Diamonds Energy & Minerals 68% 35% 39% 36% Margins Pilbara operations FOB Integrated operations EBITDA margin EBITDA margin EBITDA margin EBITDA margin Cash flows from operations Cash flows from operations Cash flows from operati
Slide 8: Global macro indicators remain supportive
8 Global macro indicators remain supportive PMIs remain elevated Global growth momentum remains healthy 65 US growth supported by record high consumer confidence and healthy 60 manufacturing and investment 55 EU performing better than expectations on stronger manufacturing and Index consumer confide
Slide 9: Robust demand drove stronger prices in 2017
9 Robust demand drove stronger prices in 2017 Iron Ore Aluminium 1 1 0.5 0.5 2015 2016 2017 2015 2016 2017 Iron ore (FOB) 2015 avg 2016 avg 2017 avg Aluminium (LME + MW Premium) 2015 avg 2016 avg 2017 avg Copper Hard Coking Coal 3 2.5 2 1 1.5 1 0.5 0.5 2015 2016 2017 2015 2016 2017 Copper 2015 avg 2
Slide 10: Outperforming in key commodities
10 Outperforming in key commodities Rio Tinto Iron Ore EBITDA performance EBITDA 58% relativity to margin (%) Platts 62% index Iron Ore EBITDA FOB margin increases to 68% 70% 0% Significant spread between high and low quality iron ores 60% -10% 50% -20% Steelmakers targeting high-grade / low-impurit
Slide 11: Higher prices driving increased earnings
11 Higher prices driving increased earnings Underlying earnings 2016 vs 2017 $ billion (post tax) 10 4.1 0.4 9 8.5 0.1 8.6 (0.3) (0.2) 8 (0.4) (0.1) (0.1) Total cost reductions1 of 7 $0.4bn post-tax or $0.6bn pre-tax 6 5.1 5 4 3 2 1 0 FY2016 Price Exchange Energy & Flexed FY16 Volumes Cash cost Esco
Slide 12: Productivity programme delivering $5 billion of additional free cash flow by 2021
12 Productivity programme delivering $5 billion of additional free cash flow by 2021 Post-tax mine to market (M2M) productivity programme ($ billion) $0.4 billion mine to market free cash flow delivered in 2017 Headwinds from raw material inputs Cumulative 2017 and 2018 mine to market 0.6 forecast o
Slide 13: Disciplined allocation of strong cash flow in 2017
13 Disciplined allocation of strong cash flow in 2017 Cash flow 2017 $8.2 billion (49)% of cash generated in 2017 ($ billion) allocated to shareholder returns ($ billion) 2.7 16.7 13.9 0.1 2.0 $1.2 billion 5.9* Total cash from asset allocated to disposals of $2.8bn Australian tax 2.5 payment $1.9 bi
Slide 14: Sustaining capital and compelling growth
14 Sustaining capital and compelling growth Capital expenditure profile Maintained sustaining capital guidance of $2.0 to $2.5 ($ billion) billion per year, including: ~6.0 ~6.0 – Iron Ore sustaining capex of ~$1 billion per year ~5.5 Pilbara replacement capital includes Koodaideri 4.5 development f
Slide 15: High-return growth
15 High-return growth Significant portfolio Longer-term Amrun Oyu Tolgoi Underground opportunities growth opportunities Creating seaborne bauxite Largest and highest quality Pilbara iron ore, Queensland bauxite, Extensive exploration and evaluation market, high-grade, expandable copper development i
Slide 16: Continuing to deliver on our promises
16 Continuing to deliver on our promises Cash returns to shareholders of $9.7 billion declared for 2017 Operating cash flow of $13.9 billion Reshaping the portfolio with divestments completed of $2.7 billion Invested $2.5 billion in high-return growth Delivered $0.4 billion free cash flow
Rio Tinto — BMO Global Metals & Mining Conference 2018 on 6ix