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PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc

Anglo American Plc · Feb 13, 2015 · 48 slides

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Slides

  1. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 1
    PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 13 February 2015 Copper, Los Bronces
  2. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 2
    AGENDA Performance Financials Conclusions and looking forward Appendix
  3. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 3
    PERFORMANCE Mark Cutifani
  4. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 4
    FINANCIAL HIGHLIGHTS Despite commodity headwinds our operational improvement continues Group underlying EBIT 4.9 bn down 25%, impacted by lower prices and Platinum strike Underlying earnings 2.2 bn (EPS 1.73) down 17% Operating…
  5. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 5
    DELIVERING ON COMMITMENTS We have delivered on our immediate restructuring milestones Sishen exceeds 35Mt production target Waste on track for 2015 & 16 ore targets. Minas-Rio FOOS delivered ahead of schedule and budget. Final capex…
  6. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 6
    OPERATING PERFORMANCE SAFETY We have seen a significant reduction in fatalities and injuries Loss of life (by business) Performance Notes 15 17 15 We deeply regret the loss of six colleagues to 13 incidents in Australia and South…
  7. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 7
    OPERATING PERFORMANCE ENVIRONMENTAL Major reduction in environmental emissions and spills reflects focus Environmental incidents (levels 3 to 5) Performance Notes 30 Focus on hazards and management disciplines reflects alignment with…
  8. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 8
    OPERATING PERFORMANCE PRODUCTION Underlying performance improvements in all commodities 2014 versus 2013 (% change) +14% +12% +8% +5% +5% +4% +3% (3)% Iron Ore Australia Met Nickel De Beers Export Platinum(2) Copper…
  9. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 9
    OPERATING PERFORMANCE UNIT COSTS Productivity improvements and cost reductions across the business SA mining inflation remains high driving SA unit cost increases with FX helping lower USD costs. 2014 Group: +5% 2014 Group Cu…
  10. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 10
    UNDERLYING EBIT DIVERSITY MITIGATES PRICING Earnings impacted by lower commodity prices... m 2014 2013 Change Basket commodity price movements(1) Iron Ore and Manganese 1,957 q 3,119 (37)% 1.1 Coal 458 q 587 (22)% Copper 1,193 q…
  11. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 11
    KUMBA Dramatically falling prices and higher waste stripping volumes FOB unit Underlying Production Realised price Capex ROCE Sishen waste Export sales cost(1) EBIT 2014 48.2 Mt 91/t 34/t 1,911m 763m 60% 187 Mt 40.5 Mt vs. 2013 +14%…
  12. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 12
    COAL Despite lower metallurgical and thermal coal pricing Export prod. FOB price Unit cost Underlying SA UG OEE(2) Grasstree Capex ROCE met / thermal met / thermal met / thermal(1) EBIT benchmark LW cutting hrs 2014 21Mt & 35Mt…
  13. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 13
    COPPER Improved plant throughput performance and benefit of currency weakness Underlying Production Realised price C1 unit cost Capex ROCE Material mined Sales EBIT 2014 748 kt 300c/lb 169c/lb 1,193m 728m 18% 373 Mt 755 kt vs. 2013…
  14. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 14
    PLATINUM Earnings impacted by five month strike and cost inflation Equ. ref. Realised Underlying Unit cost Capex ROCE Pt sales Headcount(1) production Basket price EBIT 2014 1,842 koz 2,428/oz 2,112/oz 32m 576m 0% 2,115 k/oz 42,100…
  15. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 15
    DE BEERS Strong sales and operating performance Underlying Production(1) Realised price Unit cost Capex ROCE Sales (Cons.)(1) Index price EBIT 2014 32.6Mct 198/ct 68/ct 1,363m 689m 15% 32.7Mct +7% vs. 2013 +5% 0% (5)% +36% +45% +4pp…
  16. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 16
    MINAS-RIO Successfully shipped first ore on 25 October 2014 Delivered project at 8.4 billion capex Performance notes 0.4 Iron ore production volume of 0.7 Mt (wet basis) in 1.0 2014. 8.8 8.4 7.4 8.4 Three shipments made in 2014,…
  17. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 17
    KEY PROJECTS IN EXECUTION OR RAMPING TO CAPACITY Major projects are approaching completion Met Coal - Grosvenor (100% ownership) Niobium - Boa Vista Fresh Rock (100% ownership) Project remains on target for first longwall production…
  18. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 18
    FINANCIALS Ren Medori
  19. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 19
    2014 RESULTS Despite weaker pricing environment Dividends per share (cents/share) Key financials 53 53 53 bn 2014 2013 Change Underlying EBITDA 7.8 9.5 (18)% Underlying EBIT 4.9 6.6 (25)% 32 33% 32 32 Effective tax rate 29.8%…
  20. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 20
    PRICE VARIANCE Whilst our diversified portfolio has provided an element of protection 2014 vs. 2013 EBIT variance (m) Indexed commodity prices (1 Jan 2014 = 1) 1.5 Platinum (60) precious Base & 1.4 Copper (365) Variance 1…
  21. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 21
    2014 EBIT VARIANCE Improved operational performance 2014 vs. 2013 (bn) 6.6 (2.4) (2.0) 0.1 (0.8) 0.7 (0.8) 4.9 Bulks 1.3 4.8 0.2 (0.4) Base & Precious 11% 2013 Price(1) FX Inflation(2) Volume(3) Cash Platinum Other…
  22. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 22
    GROUP CAPITAL EXPENDITURE Continued focus on reduction in committed spend and optimisation of SIB capex Capital expenditure (bn) Expansionary capital expenditure (bn) Expansionary(1) Development & stripping Stay in Business (SIB)…
  23. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 23
    NET DEBT PROFILE Lower prices are impacting our net debt position Net debt (bn) Net debt profile (bn) Long term net debt target 10bn to 12bn 14.0 Opening net debt 1 January 2014 10.7 12.9 13.5 Cash flow from operations (6.9) Capital…
  24. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 24
    PROGRESSING ON OUR DIVESTMENT PROGRAMME Its our strategic intent to focus the portfolio Lafarge Tarmac 2015 sale on track (885m) Conditional on Holcim/Lafarge merger. Lafarge and Holcim to sell assets, including Lafarge Tarmac(1) to…
  25. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 25
    CONCLUSION & LOOKING FORWARD Mark Cutifani
  26. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 26
    DRIVING VALUE 1.7BN RUN RATE SAVINGS ACHIEVED We are rebuilding our portfolio and our performance engine Attributable EBIT bn 30 June 2013 prices and FX 1.5 7.3bn 1.6 0.9 5.0bn 0.9 0.9 3.3bn 1.7bn of attributable EBIT Delivered…
  27. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 27
    DRIVING VALUE PROJECTS0.9BN AT 30 JUNE 2013 PRICES We have established control of our major projects 2014 2016 Project Comment delivered estimate 800m Commissioned 2 months early Minas-Rio - Forecast capex 400m below revised budget…
  28. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 28
    DRIVING VALUE ASSET REVIEW1.6BN AT 30 JUNE 2013 PRICES We are already seeing the benefits of our operational improvement initiatives Business 2014 2016 Operation Comment Unit delivered estimate Coal Moranbah/Grasstree UG 400m 550m e.g.…
  29. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 29
    DRIVING VALUE VALUE LEAKAGE1.5BN AT 30 JUNE 2013 PRICES We are restructuring our overhead and support cost base Value leakage 2014 delivered 2016 estimate Comment Low value projects stopped (Pebble etc.) Project expenditure 330m 300m…
  30. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 30
    KEY RISKS We are managing the business in difficult times KEY RISKS Asset disposalcurrent price environment Operating strategy developed for each asset Sale for value Continue to refine portfolio Water in Chile/Brazil5th year of…
  31. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 31
    2015 DELIVERABLES A clear set of deliverables Minas-Rio Ramp up to 80% capacity by year end. Portfolio Lafarge Tarmac completion targeted for 2015. Other assets in process. Roll-out of Operating model to priority assets Sishen…
  32. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 32
    APPENDIX
  33. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 33
    PRODUCTION OUTLOOK(1) 2013 2014 2015 2016 2017 Copper (2) 775Kt 748kt 720-750kt 720-750kt 710-740kt Nickel(3) 34kt 37kt 20-25kt 40-45kt 42-45kt 49-51Mt 49-51Mt Iron ore (Kumba)(4) 42Mt 48Mt 47-48Mt Previously 48-50 Mt Previously…
  34. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 34
    RECONCILIATION OF TOTAL CAPITAL EMPLOYED TO AVERAGE ATTRIBUTABLE CAPITAL EMPLOYED bn 31 Dec 2014 31 Dec 2013(1) 31 Dec 2012(1) Net assets 32 37 44 Less: financial asset investments (1) (2) (2) Add: net debt 13 11 9 Less: De Beers fair…
  35. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 35
    ATTRIBUTABLE ROCE 2014 2013 Business units Average Average Attributable attributable capital Attributable Attributable attributable capital Attributable EBIT(1) (bn) employed (bn) ROCE (%) EBIT(1) (bn) employed(2) (bn) ROCE(2) (%)…
  36. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 36
    EARNINGS SENSITIVITIES(1) Impact of change Sensitivities analysis (m) Commodity / Currency Movement Average EBIT Iron Ore (62% CFR China) 10/t 97 370 Hard Coking Coal (FOB Australia) 10/t 125 121 PCI 10/t 92 76 Thermal Coal (FOB…
  37. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 37
    AVERAGE MARKET PRICES 2014 2013 Change Iron ore (62% Fe CFR)(1) - /t 97 135 (28)% Thermal coal (FOB South Africa) - /t 72 80 (10)% Thermal coal (FOB Australia) - /t 71 84 (15)% HCC (FOB Australia average quarterly benchmark) - /t…
  38. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 38
    CAPITAL EXPENDITURE(1) m 2014 2013 Change Kumba Iron Ore 763 655 +16% Iron Ore Brazil 1,922 1,863 +3% Coal 1,005 1,263 (20)% Copper 728 959 (24)% Nickel 14 (28) n/a- Niobium and Phosphates 239 236 +1% Platinum 576 601…
  39. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 39
    PRICE AND FX ASSUMPTIONS FOR ROCE TARGET Commodity and currency 30 June 2013 31 December 2014(1) Iron Ore 62% Fe CFR(2) 116/t 72/t Thermal FOB South Africa 74/t 66/t Thermal FOB Australia 78/t 65/t HCC FOB Australia 145/t(3) 119/t…
  40. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 40
    PRICE VARIANCE BULKS Iron ore sales(1) (Mt) Metallurgical coal sales(2) (Mt) Higher-margin mix Realised Realised 125/t 91/t 140/t 111/t price(3) price(4) 16.5 17.8 22.8 23.7 21% 23% 28% 28% 54% 57% Coking Export 80% 78% sales…
  41. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 41
    EXCHANGE VARIANCE 2014 vs. 2013 (m) Rand weakend 12% compared to 2013 H1 2013 average H2 2013 average H1 2014 average H2 2014 average 9.21 10.08 10.70 11.00 1,318 +8% 12.0 Other(1) 162 ZAR / USD 11.0 CLP 185 10.0 9.0…
  42. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 42
    SALES VOLUME VARIANCE 2014 vs. 2013 (m) Sales volume performance (% change vs. 2013) 678(1) 12% Platinum 367 8% (adjusted for strikes) Increase in copper De Beers 170 4% equivalent production KIO +4%(5) 2% Coal Aus…
  43. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 43
    DEBT MATURITY PROFILE AT 31 DECEMBER 2014 Debt repayments (bn) at 31 December 2014 3.9 2.9 2.0 2.1 2.1 2.0 1.8 1.5 1.2 2015 2016 2017 2018 2019 2020 2021 2022 2023+ Corporate BNDES Other subs. Euro Bonds US Bonds A…
  44. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 44
    DE BEERS: KEY FINANCIAL METRICS H1 H2 FY H1 H2 FY USbn 2014 2014 2014 2013 2013 2013 Revenue(1) 3.8 3.2 7.0 3.3 3.0 6.3 Rough diamond sales 3.5 3.0 6.5 3.0 2.8 5.8 Element Six and other 0.3 0.2 0.5 0.3 0.2 0.5 Production costs (0.7)…
  45. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 45
    DE BEERS: SUPPLEMENTARY DATA BY KEY MINE (1 OF 2) H1 H2 FY H1 H2 FY 2014 2014 2014 2013 2013 2013 Jwaneng Waste mined (Mt) 58.5 56.7 115.2 45.9 58.0 103.9 5.0 5.6 10.6 3.5 4.6 8.1 (50%/19.2% economic interest) Ore mined (Mt)…
  46. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 46
    DE BEERS: SUPPLEMENTARY DATA BY KEY MINE (2 OF 2) H1 H2 FY H1 H2 FY 2014 2014 2014 2013 2013 2013 Venetia Waste mined (Mt) 21.7 19.9 41.6 17.4 12.4 29.8 Ore mined (Mt) 2.7 3.2 5.9 1.4 3.5 4.9 DBCM (74%) Material treated (Mt) 2.9…
  47. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 47
    ROCE AND ATTRIBUTABLE ROCE DEFINITION Return on capital employed (ROCE) is a ratio that measures the efficiency and profitability of a companys capital investments. It displays how effectively assets are generating profit for the size of…
  48. PRELIMINARY RESULTS YEAR ENDED 31 DECEMBER 2014 – Anglo American Plc – slide 48
    FOOTNOTES Slide 9 Slide 20 (1) Includes RSA trade and Cerrejn (1) Excludes non-controlling interest share of capital employed and operating profit, and De Beers fair value uplift on original 45% shareholding. See appendix for further…

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