Anglo American Plc · LSE:AAL

Anglo American — BMO Global Metals & Mining Conference 2017

14 slides from Anglo American's conference presentation, February 2017

  1. Slide 1: 2016 Results – BMO Conference

    2016 RESULTS – BMO CONFERENCE February 2017

  2. Slide 2: Delivering Change, Building Resilience

    DELIVERING CHANGE, BUILDING RESILIENCE 1 Delivering on • Free cash flow target exceeded…$2.6bn vs $0.4bn. commitments • Net debt at $8.5bn…………..well below $10bn target. 2 Operational • Operating model driving productivity improvements. improvement • EBITDA margin up 5% points…despite lower prices. 3

  3. Slide 3: Delivering on Our Commitments

    DELIVERING ON OUR COMMITMENTS Actual Target EBITDA(1) $6.1bn $4.5bn(2)  Cost & volume improvements $1.5bn $1.6bn ~ Capital expenditure(3) $2.5bn <$2.7bn  Attributable free cash flow $2.6bn $0.4bn(2)  Net debt $8.5bn <$10bn  Net debt / EBITDA(1) 1.4x <2.5x  Note: Based on targets set in February

  4. Slide 4: Margins Improving 5% Points Despite Lower Prices

    MARGINS IMPROVING 5% POINTS DESPITE LOWER PRICES Indexed prices (1 Jan 2015 = 1)(1) and EBITDA margins Margin focus EBITDA margin Basket price Average annual • EBITDA and free cash flow basket price improved through: Index 26%  Portfolio upgrading. 1.1 21%  Improved productivity and costs. 1.0  L

  5. Slide 5: $1.5bn EBITDA Cost & Volume Improvement

    $1.5BN EBITDA COST & VOLUME IMPROVEMENT Incremental EBITDA improvement ($bn) - 2016 0.4 De Beers (0.1) 1.5 1.2 Coal Operating Other efficiencies Input costs (0.1) Labour (0.2) Los Bronces Met Coal Exploration weather(1) and geological strike impact issues Overheads Cost Volume Platinum non-cash Tota

  6. Slide 6: $4.4bn Reduction in Net Debt & 37% Decline in Capex

    $4.4BN REDUCTION IN NET DEBT & 37% DECLINE IN CAPEX Net debt ($bn)(1) Capital expenditure ($bn)(4) Expansionary Capex Opening net debt – 1 January 2016 12.9 Stripping & development (37)% SIB Cash flow from operations (5.4) 4.0 Working capital (0.4) Capital expenditure(2) 2.4 1.9 Cash tax paid 0.5 2.

  7. Slide 7: Significant Progress on Change Platform

    SIGNIFICANT PROGRESS ON CHANGE PLATFORM… • Functional Model…implemented and “indirects” reduced 33%. Organisation • Headcount………….….reduced by ~40% across the business. • Assets sold/closed(1)…reduced by 27 to 41…dealing with the tail. Portfolio • Major projects(2)…………………delivered 5 per key commitme

  8. Slide 8: Delivering Meaningful Progress Since 2012

    …DELIVERING MEANINGFUL PROGRESS SINCE 2012. Safety and • Safety…..incidents down 50% but more work needed on fatal risks. environment • Environmental incidents…down 85% due to upgrading standards. • Copper-equivalent production…….up 8%. Operational improvements • Copper-equivalent unit costs…down 31

  9. Slide 9: Productivity Improvements Ongoing

    PRODUCTIVITY IMPROVEMENTS ONGOING 110 108 (1) Includes benefits of portfolio upgrading. (2) Cu Equiv (Copper-equivalent) is calculated using long-term consensus parameters. Excludes domestic / cost-plus production. Production shown on a reported basis. (3) Unit cost includes only AA’s equity share o

  10. Slide 10: Portfolio Upgrading Continued in 2016

    PORTFOLIO UPGRADING CONTINUED IN 2016 Portfolio upgrading MARGINS AND RETURNS Rustenburg  Portfolio clean-up of lower margin / shorter life Callide assets will continue – Union disposal announced in Foxleigh the past week. Niobium and Phosphates Disposals(1) Exxaro  Niobium and Phosphates sold for

  11. Slide 11: Building a Resilient Business

    BUILDING A RESILIENT BUSINESS De Beers Platinum Copper Bulks and Other Minerals  Jwaneng  Mogalakwena  Sishen Botswana Iron ore  Los Bronces  Kolomela  Orapa  Amandelbult and Chile  Minas-Rio manganese  Venetia • Samancor South Africa South • BRPM  Collahuasi • Voorspoed Africa • SA Therma

  12. Slide 12: Targeting a Further $1bn Improvement

    TARGETING A FURTHER $1BN IMPROVEMENT Incremental EBITDA improvement ($bn) 2017 Targeting $1.0bn cost & volume improvement  $0.5bn in plan. 4.1  ~$0.25bn identified.  ~$0.25bn work in progress. 1.0 1.5 Costs 2017 Focus – apply Operating Model disciplines 1.0  Optimising operational design & manag

  13. Slide 13: Financial Guidance – Key Metrics

    FINANCIAL GUIDANCE – KEY METRICS Financial metrics and net debt 2017F $bn EBITDA cost and volume improvement 1.0 Capex(1) ~2.5 Attributable free cash flow (based on average 2016 realised prices) ~2.0 Net debt (based on average 2016 realised prices) <7.0 Balance sheet target – using long term consens

  14. Slide 14: Delivering Change, Building Resilience

    DELIVERING CHANGE, BUILDING RESILIENCE • Free cash flow target exceeded…$2.6bn vs $0.4bn. • Net debt at $8.5bn…………..well below $10bn target. Delivering on our commitments to drive shareholder • EBITDA margin up 5% points…despite lower prices. returns • Investment grade rating……….….remains an objecti

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