South32 Ltd. · ASX:S32
South32 — Macquarie Australia Conference 2016
17 slides from South32's conference presentation, May 4, 2016
Slide 1: Macquarie Australia Conference 2016
4th May 2016 South32 Limited For personal use only (Incorporated in Australia under the Corporations Act 2001 (Cth)) (ACN 093 732 597) ASX / LSE / JSE Share Code: S32 ISIN: AU000000S320 south32.net MACQUARIE AUSTRALIA CONFERENCE 2016 South32 Limited Chief Executive Officer, Graham Kerr, will present
Slide 2: Macquarie Australia Conference, 4 May 2016
For personal use only MACQUARIE AUSTRALIA CONFERENCE • 4 MAY 2016
Slide 3: Important Notices
• IMPORTANT NOTICES The purpose of this presentation is to provide general information about South32 Limited. This presentation should be read in conjunction with the Annual Financial Report as at 30 June 2015, Financial Results and Outlook – Half Year ended 31 December 2015, Quarterly Report for Ma
Slide 4: A Globally Diversified Metals and Mining Company
For personal use only • A GLOBALLY DIVERSIFIED METALS AND MINING COMPANY Operations 1. Based on H1 FY16. Manganese revenue and Underlying EBITDA presented on a proportional consolidation (60 per cent) basis. Revenue by market represents location of customer. 4 MAY 2016 MACQUARIE AUSTRALIA CONFERENCE
Slide 5: A Simple Strategy to Maximise Returns
• A SIMPLE STRATEGY TO MAXIMISE RETURNS OUR STRATEGY For personal use only To invest in high quality metals and mining operations where our distinctive capabilities and regional model enable us to stretch performance in a sustainable way. By maintaining financial discipline and continually optimisin
Slide 6: Optimising Performance
For personal use only OPTIMISING PERFORMANCE Our strong balance sheet We are on track to reduce remains a key point of difference Our operations are well controllable costs by US$300M positioned on industry cost and capital expenditure by curves US$218M in FY16 Net cash US$18M (as at 31 March 2016)
Slide 7: Well Positioned on Industry Cost Curves
WELL POSITIONED ON INDUSTRY COST CURVES FY16 production CY15 cost curve position by operation For personal use only guidance1 1st quartile 2nd quartile 3rd quartile 4th quartile 36.5 Kt Cerro Matoso Ni 21.6Moz Ag Cannington 175Kt Pb 80kt Zn 3.0 Mt Australia Manganese Mn Ore 2.3 Mt South Africa Manga
Slide 8: Optimising Well Underway
OPTIMISING WELL UNDERWAY • Achieved US$182M of controllable cost savings in Group employee and contractor headcount1,2 For personal use only H1 FY16 and remain on track to deliver US$300M in FY16 -17% ~27,000 • Restructuring at Worsley Alumina, South Africa Manganese and the Australia Manganese mini
Slide 9: Worsley Alumina and Illawarra Metallurgical Coal
WORSLEY ALUMINA AND ILLAWARRA METALLURGICAL COAL Worsley Alumina Worsley Alumina: All-in cost and volume For personal use only (US$/t) • Large, low-impurity bauxite resource 3.8 4.0 Production1 (Mt) • Completed in 2011, US$3.2B Efficiency & Growth project; positioned the refinery as one of the large
Slide 10: South Africa and Australia Manganese
SOUTH AFRICA AND AUSTRALIA MANGANESE South Africa Manganese South Africa Manganese: All-in cost and volume For personal use only (US$/dmtu) • 900ktpa1 cut in saleable manganese production following 2.3 1.7 Ore production2,3 strategic review completed in February (Mt) • Reconfigured operation has gre
Slide 11: Cerro Matoso and Cannington
CERRO MATOSO AND CANNINGTON Cerro Matoso Cerro Matoso: All-in cost and volume For personal use only (US$/lb) • Restructure initiatives are targeting all-in cost reductions 40.4 36.0 Production2 by FY17 (kt) • La Esmeralda1 will improve nickel head grade between -30% 5.54 FY18 and FY22 for a modest c
Slide 12: South Africa Energy Coal and African Smelters
SOUTH AFRICA ENERGY COAL AND AFRICAN SMELTERS South Africa Energy Coal South Africa Energy Coal: Production1 For personal use only (Mt) 34.3 • Increasing Rand denominated cost pressure and higher 32.0 31.0 stripping activities as new mining areas accessed • Lower production volumes expected in FY16
Slide 13: Reserve Life and Production Outlook
RESERVE LIFE AND PRODUCTION OUTLOOK Reserve and Resource Life of upstream operations1 Indicative production profile5 For personal use only (Years) (Normalised: index 1 = FY15) Reserve Life Resource Life Khutala 12 97 1.00 South Africa Klipspruit 5 16 Energy Coal2 Wolvekrans- 22 30 0.80 Middelburg Wo
Slide 14: Internal Opportunities
• INTERNAL OPPORTUNITIES • US$565M Appin Area 9 Project completed 33% under For personal use only budget and ahead of schedule • US$139M1 PC02 and $US30M1 Wessels Central Block projects remain under budget and are nearing completion Cerro Matoso • Options in feasibility and concept phase will compet
Slide 15: Identify Opportunities to Compete for Capital
For personal use only • IDENTIFY OPPORTUNITIES TO COMPETE FOR CAPITAL ROIC Net Debt / (Cash) (US$M) 6741 Competition for excess capital Maximise cash flow Cash flow priorities Distribute a minimum 402 -US$286M 40% of Underlying earnings as ordinary dividends Maintain safe and reliable 116 -US$134M o
Slide 16: Summary
For personal use only • SUMMARY OPTIMISE • Operations well positioned on industry cost curves • Significant reduction in controllable costs and capital expenditure • Focussed on optimising operational performance • Strong balance sheet a key point of difference UNLOCK • Operations have long reserve
Slide 17: South32
For personal use only SOUTH32