South32 Ltd. · ASX:S32
South32 — H1 FY25 Earnings Presentation
57 slides from South32's earnings presentation, Feb 13, 2025
Slide 1: 2025 Half Year Financial Results
2025 HALF YEAR FINANCIAL RESULTS 13 February 2025
Slide 2: Important Notices
IMPORTANT NOTICES This presentation should be read in conjunction with the “Financial Results and Outlook – half year ended 31 December 2024” announcement released on 13 February 2025, which is available on South32’s website (www.south32.net). FORWARD-LOOKING STATEMENTS This presentation contains fo
Slide 3: Important Notices
IMPORTANT NOTICES The Group’s profit after tax attributable to members increased by US$307M to US$360M in H1 FY25, as we delivered strong operating results and capitalised on improved commodity prices. Underlying earnings1 increased by US$335M to US$375M in H1 FY25. Consistent with our accounting po
Slide 4: H1 FY25 Safety Performance
H1 FY25 SAFETY PERFORMANCE We remain united by our belief that everyone can go home safe and well every day Fatalities6,7 Lost time injury frequency (LTIF)8 • On 17 September 2024, Mr José Luis Pérez was fatally injured in an incident at Cerro Matoso. Our deepest sympathies remain with Mr Pérez’s 2
Slide 5: Our Transformed Portfolio
OUR TRANSFORMED PORTFOLIO We have transformed our portfolio to be focused on minerals and metals critical to the world's energy transition H1 FY25 milestones Illustrative H1 FY25 Group Underlying EBITDA(a) Sold Illawarra Metallurgical Coal (IMC)10 for up to US$1.65B, unlocking significant value and
Slide 6: H1 FY25 Financial Performance
H1 FY25 FINANCIAL PERFORMANCE Our strong financial performance and balance sheet is supporting investment in growth and shareholder returns Net profit after tax Underlying EBITDA US$360M(a) US$1,018M Lowered net debt by 1 12 US$715M to US$47M Underlying earnings Operating margin US$375M 28% Invested
Slide 7: Performance Summary and Outlook
PERFORMANCE SUMMARY AND OUTLOOK Continuing our strong operating performance, unlocking value from our growth pipeline and rewarding shareholders FY25 production guidance is unchanged, except Mozal Aluminium Lower Operating unit costs for the majority of our guided where guidance has been updated to
Slide 8: Financial Results
FINANCIAL RESULTS
Slide 9: Performance Analysis
PERFORMANCE ANALYSIS Our strong operating performance enabled the Group to capitalise on improved commodity prices Alumina Aluminium Copper Illustrative H1 FY25 Underlying EBITDA by commodity(a) operating margin operating margin operating margin14 4% 55% 52% 53% 12% 43% 41% Alumina 34% 31% Ramp-up o
Slide 10: Earnings Analysis
EARNINGS ANALYSIS Significantly improved earnings from our aluminium value chain and base metals Sales price by commodity (US$M), including: Sales volume by commodity (US$M), including: Alumina 282 Aluminium 159 Aluminium 223 (a) Copper 44 Base metals 87 (US$M) 11 (72) 109 (177) 84 627 (80) (101) 26
Slide 11: Cost Analysis
COST ANALYSIS The sale of IMC has permanently lowered our cost base H1 FY25 expenditure for market traded consumables and energy supply(a) Temporary increase in controllable costs, largely related to a drawdown of inventory (US$M), including: 6% 6% Energy Drawdown of finished goods inventory at Hill
Slide 12: Cash Flow Analysis
CASH FLOW ANALYSIS Higher operating cash flow and the sale of IMC saw Group net debt reduce by US$715M, while we continued our investments to grow future volumes and returned US$169M to shareholders (US$M) 933 (230) (248) H1 build in working capital following a temporary increase in inventory and hi
Slide 13: Balance Sheet
BALANCE SHEET A strong balance sheet is at the core of our strategy December 2024 net cash/(debt) (US$M) 1,600 A release of working capital 23 is expected to add to cash Our liquidity position is strong, with US$1.6B cash and an generation in H2 FY25 undrawn US$1.4B revolving credit facility, with m
Slide 14: Capital Management Framework
CAPITAL MANAGEMENT FRAMEWORK Our unchanged capital management framework supports investment in our business and is designed to reward shareholders as our financial performance improves Capital management framework Capital allocation since FY16 Shareholder returns(a) (US$M) (US$M) 2%2% ROIC 19% 800 C
Slide 15: Our Shareholder Returns
OUR SHAREHOLDER RETURNS Reduced our shares on issue by 15% since the inception of our on-market share buy-back, with US$171M remaining to be returned ahead of extension or expiry of the current program(a) Cumulative EPS26 (LHS) and South32 share price (RHS) (US cents per share from 31 December 2016,
Slide 16: Outlook
SOUTH32 OUTLOOK
Slide 17: Production Guidance
PRODUCTION GUIDANCE FY25 production guidance remains unchanged, except for Mozal Aluminium, where guidance has been updated to 350kt (from 360kt13) Alumina (kt) Aluminium (kt) Copper equivalent27 (kt) Worsley Alumina environmental approvals received; Mozal Aluminium mitigating impacts of civil unres
Slide 18: Operating Unit Costs Guidance
OPERATING UNIT COSTS GUIDANCE Lower Operating unit costs expected for the majority of our guided operations in H2 FY25 Worsley Alumina (US$/t)29,30 Brazil Alumina (non-operated) (US$/t) 306 290 305 258 325 320 FY25e guidance increased by 5%: FY25e: will continue to be with higher caustic soda Guidan
Slide 19: Operating Unit Costs Guidance
OPERATING UNIT COSTS GUIDANCE Lower Operating unit costs expected for the majority of our guided operations in H2 FY25 Sierra Gorda (non-operated) (US$/t)29,30,31 Cannington (US$/t)29,30,31 197 18.8 170 175 17.1 16.0 16.0 150 FY25e guidance increased by 3%: FY25e guidance unchanged: with lower costs
Slide 20: Capital Expenditure Guidance
CAPITAL EXPENDITURE GUIDANCE Investing to grow our base metals production with lower sustaining capital intensity following the sale of IMC FY25e Safe and reliable(a),(b) FY25e Improvement and life extension(a),(c) FY25e Growth - Hermosa(d) (US$M per annum) (US$M per annum) (US$M per annum) 25% 21%
Slide 21: Australia Manganese Update
AUSTRALIA MANGANESE UPDATE Delivering a safe return to operations following Tropical Cyclone Megan Wharf repairs underway (January 2025) • Production resumed from the primary concentrator and FY25 guidance remains unchanged at 1,000kwmt Production and sales • Subject to further impacts from the wet
Slide 22: Worsley Alumina Update
WORSLEY ALUMINA UPDATE State and Federal environmental approvals received for our next bauxite mining areas Bauxite mining areas • Worsley Alumina has now received primary State34 and Federal35 environmental approvals for the Worsley Mine Development (Project) N Approvals • Mining of bauxite areas l
Slide 23: Alumina Market
ALUMINA MARKET China's constrained bauxite supply and reliance on Guinea tightened Future refinery builds are expected outside of China due to the alumina market when Guinea imposed certain export restrictions declining Chinese bauxite self-sufficiency and environmental policies Alumina prices(a) Ch
Slide 24: Aluminium Market
ALUMINIUM MARKET With China’s smelting capacity expected to be capped at 45Mt, Demand outpaced supply in CY24 and higher cost inducement projects ex-China are required inventories continue to be drawn lower to meet increasing energy transition demand Aluminium price and stocks(a) Aluminium productio
Slide 25: Copper Market
COPPER MARKET Strong long-term primary demand outlook Tight concentrate markets and declining inventories have requiring new mine supply despite scrap recycling resulted in record low treatment and refining charges and potential substitution towards aluminium Global copper price and inventories(a) T
Slide 26: Zinc Market
ZINC MARKET Global supply challenges and improving Primary demand growth expected to outpace production by demand has supported prices ~4Mt to 2033, an industry challenge similar in magnitude to copper Zinc price and stocks(a) Mine production capability versus primary demand(b) (US$/t, LHS, Kt, RHS)
Slide 27: Portfolio and Growth
r ke S O ra O fa Z <x PORTFOLIO SOUTH32
Slide 28: Our Portfolio
OUR PORTFOLIO An attractive commodity mix and growth pipeline in minerals and metals critical to the world's energy transition Ambler Metals JV Arctic deposit Bornite deposit Hermosa Taylor project Cerro Matoso Clark deposit Peake deposit MRN Bauxite Brazil Alumina Australia Manganese Brazil Alumini
Slide 29: Our Growth Pipeline
OUR GROWTH PIPELINE Advancing our high-quality development projects and pipeline of growth options in base metals Copper equivalent production36 Projects in further study phases and exploration ~16%(a) Hermosa Hermosa Catabela Northeast Ambler Metals Chita Valley and 25+ greenfield Clark near-mine a
Slide 30: Sierra Gorda Copper
SIERRA GORDA COPPER Growing metal production from our cornerstone copper asset Plant de-bottlenecking and improved ore quality to underpin Progressing options to unlock value and grow future copper production payable copper production growth of 15% in FY25 and 6% in FY26 Ore processed Payable copper
Slide 31: Our Hermosa Project
OUR HERMOSA PROJECT A regional scale project with the potential to produce critical minerals across multiple deposits for decades, underpinned by Taylor as the first development Patented • Feasibility study confirmed potential for a top 10 global zinc mine38 in the Unpatented industry's first cost q
Slide 32: Our Taylor Deposit
OUR TAYLOR DEPOSIT Delivering planned permitting and construction milestones at Taylor Construction of ventilation shaft (left), main shaft (right) and completed concentrator pad (top) All State approvals received and draft Environmental Impact Statement for FAST-41 on-track for mid-CY25 All dewater
Slide 33: Hermosa Near Mine Exploration Potential
HERMOSA NEAR MINE EXPLORATION POTENTIAL Drill results continue to support potential for a continuous copper system connecting Peake and Taylor Deeps Peake deposit (looking east) Shafts (in progress) Clark deposit • Seven new drill holes have returned further high-grade copper intercepts, including 1
Slide 34: Our Future Growth Through Discovery
OUR FUTURE GROWTH THROUGH DISCOVERY Progressing our pipeline of exploration prospects as we work to discover our next generation of base metals mines Ambler Metals JV (50%) and 11.5% equity interest in Trilogy Metals Copper • High-grade polymetallic Arctic deposit(b) of 43Mt @ 2.93% Cu and 4.30% Zn
Slide 35: H1 FY25 Summary
H1 FY25 SUMMARY Transformed our portfolio, delivered earnings growth and increased shareholder returns Underlying EBITDA US$1,018M Sale of IMC unlocked significant value Delivered strong operating results and streamlined our portfolio across our business Group operating margin12 28% Lowered net debt
Slide 36: Supplementary Information
— W= — SOUTH32 SUPPLEMENTARY INFORMATION
Slide 37: Earnings Sensitivities
EARNINGS SENSITIVITIES EBIT sensitivity(a) +/- 10% Commodity US$M Aluminium(b) 330 (b) Alumina 263 Copper(c) 71 Nickel 42 Silver 31 Manganese ore(d) 30 Lead 18 Zinc 13 Australian dollar 136 South African rand 130 Brazilian real 35 Colombian peso 31 Chilean peso 19 Notes: a. The sensitivities reflect
Slide 38: Operating Unit Costs Guidance
OPERATING UNIT COSTS GUIDANCE H1 FY25 FY25 FY25 FY25 prior guidance vs. FY25 new guidance Operating unit costs Commentary actual prior guidance29 new guidance30 (6%) (3%) 0% 3% 6% Worsley Alumina Higher caustic soda consumption in the current bauxite 306 290 305 (US$/t) mining areas, partially offse
Slide 39: Closure & Rehabilitation Provisions
CLOSURE & REHABILITATION PROVISIONS Closure and rehabilitation H1 FY25 FY24 South32 Group provisions by operation (South32 share, excluding EAIs) US$M US$M Includes US$241M benefit from the sale of IMC Worsley Alumina 932 976 Brazil Alumina (non-operated) 92 99 Profit and loss impact Balance sheet B
Slide 40: Capital Expenditure Guidance
CAPITAL EXPENDITURE GUIDANCE H1 FY25 FY25e Capital expenditure excluding exploration and intangibles (South32 share) US$M US$M Worsley Alumina 38 90 Brazil Alumina 22 50 Brazil Aluminium 6 10 Hillside Aluminium 19 55 Mozal Aluminium 12 25 Cannington 23 45 Cerro Matoso 13 20 Safe and reliable capital
Slide 41: Footnotes
FOOTNOTES 1. Refers to Underlying earnings attributable to members. Members are equity holders of South32 Limited. Amounts reported as attributable to members are stated net of amounts attributable to non-controlling interests. 2. Applicable for five years from the date of completion of the sale of
Slide 42: Footnotes
FOOTNOTES 27. Payable copper equivalent production (kt) was calculated by aggregating revenues from copper, molybdenum, gold and silver, and dividing the total Revenue by the price of copper. FY24 realised prices for copper (US$3.86/lb), molybdenum (US$20.60/lb), gold (US$2,129/oz) and silver (US$24
Slide 43: South32
SOUTH32
Slide 44: Annexure 1: JORC Code Table 1: Peake Deposit
Annexure 1: JORC Code Table 1: Peake Deposit The following tables provide a summary of important assessment and reporting criteria used for the reporting of Exploration Results for the Peake deposit, which forms part of the Hermosa Project located in South Arizona, USA (Figure 1). Sections 1 and 2 b
Slide 45: JORC Table 1: Logging and Sub-sampling
Criteria Commentary Logging • The entire length of core is photographed and logged for lithology, alteration, structure, rock quality designation (RQD) and mineralisation. • Logging is both quantitative and qualitative, of which there are several examples including estimation of mineralisation perce
Slide 46: JORC Table 1: Quality Control and Verification
Criteria Commentary CRMs fail, the entire batch is re-analysed. No material failures have been observed from the data. • Coarse and fine-grained certified silica blank material submissions, inserted at the beginning and end of every work order of approximately 200 samples, indicate a lack of systema
Slide 47: JORC Table 1: Audits or Reviews
Criteria Commentary • Assays are reconciled and results are processed in a secure database (acQuire) which has password and user level security. • Core is stored in secured onsite storage prior to processing. After sampling, the remaining core, returned sample rejects and pulps are stored at a purpo
Slide 48: Section 2 Reporting of Exploration Results
Section 2 Reporting of Exploration Results (Criteria listed in the preceding section also apply to this section.) Criteria Commentary Mineral • The Hermosa Project mineral tenure (Figure 1) is secured by 30 patented mining claims, tenement and totalling 228 hectares that have full surface and minera
Slide 49: JORC Table 1: Data
Criteria Commentary • A drill hole plan view (Figure 3) provides a summary of drilling collar locations that support the Peake deposit exploration results and surface geology. Figure 4 provides the Peake deposit exploration drill holes relative to the mineralisation domains. Figure 5 provides the dr
Slide 50: JORC Table 1: Further Work
Criteria Commentary • Downhole Electromagnetic (DHEM) surveys have been conducted on a selection of drill holes in the Peake deposit area. • Quality control of geophysical data includes using a third-party geophysical consultant to verify data quality and provide secondary inversions for comparison
Slide 51: Figure 1: Regional location plan
Figure 1: Regional location plan 2025 HALF YEAR FINANCIAL RESULTS – PEAKE EXPLORATION RESULTS
Slide 52: Figure 2: Hermosa project regional geology
Figure 2: Hermosa project regional geology 2025 HALF YEAR FINANCIAL RESULTS – PEAKE EXPLORATION RESULTS
Slide 53: Figure 3: Peake deposit local geology and collar locations
Figure 3: Peake deposit local geology and Exploration Results collar locations 2025 HALF YEAR FINANCIAL RESULTS – PEAKE EXPLORATION RESULTS
Slide 54: Figures 4 and 5: Mineralisation domains plan and cross-section
Figure 4: Plan view of the Taylor, Clark, Peake Mineralisation Domains, and approximate shaft locations with previously reported drill holes and newly reported exploration drill holes labelled. Figure 5: Cross-section through the Taylor, Clark, and Peake mineralisation domains showing exploration re
Slide 55: Figure 6: Cross-section through Peake mineralisation domains
Figure 6: Cross-section through the Peake mineralisation domains showing exploration results, simplified geology, Taylor Thrust. Looking WNW, 2000m wide. 2025 HALF YEAR FINANCIAL RESULTS – PEAKE EXPLORATION RESULTS
Slide 56: Figure 7: Level plan map and Table 1 drill hole collars
Figure 7: Level plan map at 380m elevation showing Peake drillholes and mineral domains. Newly reported hole IDs are blue. Table 1: Hole ID, collar location, dip, azimuth, and drill depth of new drill holes from the Peake Deposit East North Elevation Wedge Depth TD Depth Hole ID Dip Azimuth (UTM) (U
Slide 57: Table 2: Significant intersections – Peake Deposit
Table 2: Significant intersections – Peake Deposit Exploration Results From To Width Zinc Lead Silver Copper Molybdenum CuEq ZnEq Hole ID Cut Off (m) (m) (m) (%) (%) (ppm) (%) (%) (%) (%) 1318.7 1348.6 0.2% Cu 29.9 0.75 0.15 18 0.35 - 0.81 - Including HDS-630 1318.7 1326.5 0.2% Cu 7.8 0.89 0.07 26 0