Anglo American plc · LSE:AAL
Anglo American — Merrill Lynch Conference 2007
21 slides from Anglo American's conference presentation, May 2007
Slide 1: Unlocking Our Full Potential
Unlocking Our Full Potential Merrill Merrill Lynch Lynch Conference Conference Cynthia Cynthia Carroll Carroll May May 2007 2007 This presentation is being made only to and is directed only at (a) persons who have professional experience in matters relating to investments falling within Article 19(1
Slide 2: Agenda
Agenda 1: Anglo Overview 2: Portfolio Restructuring Progress Update 3: Our Ambition & Emerging Priorities 4: Summary 1 Anglo American plc
Slide 3: A Focused Mining Group
A Focused Mining Group • One of the world’s largest and most profitable mining companies – Operating footprint spanning 65 countries – Balanced participation across precious, base and bulk commodities – Record revenue of $38bn and earnings of $5.5bn in 2006 • Market capitalisation of ~$80bn Our five
Slide 4: Restructuring Programme Update
Restructuring Programme Update • On-track to exit holding over two years • De-merger set for July 2007 • Final regulatory approvals obtained • Aggressively pursuing short-term opportunities to improve performance • Evaluating fit within portfolio 3 Anglo American plc
Slide 5: Our Starting Point Today
Our Starting Point Today • Global footprint with world class asset base • Excellent organic growth pipeline ($7bn approved) and track record of project delivery • High quality, skilled, and motivated workforce • Outstanding global exploration capabilities • Strong sustainable development record • Ex
Slide 6: Our Ambition
Our Ambition To be the leading global mining company of choice • Highest performing assets • Maximise our share of profitable industry growth • Set the standard for safety in the industry • Preferred partner for governments and communities • Supplier of choice to our customers • Best developer of ta
Slide 7: Many Changes Already Underway
Many Changes Already Underway • Removal of Chairman roles for each business • Simplified committee structure and removal of internal “board” structures to speed decision making • Revised business review process with stronger, consistent focus on driving performance • Responded to recent growth oppor
Slide 8: Near-term Priorities
Near-term Priorities 1. Achieving cost and productivity improvements 2. Aggressively pursuing identified core growth opportunities 3. Leveraging our capabilities to accelerate profitable growth 4. Embedding a stronger performance culture & streamlined management model 5. Ensuring a sharper focus on
Slide 9: 1. Cost and Productivity Improvements
1. Cost and Productivity Improvements Creating an integrated Anglo American – “One Anglo” Procurement: Centralisation of key elements to capture scale benefits Shared Services & South African treasury functions Infrastructure: Human Resources Internal Audit De-layering the Organisation Common BU Sta
Slide 10: 1. Cost and Productivity Improvements
1. Cost and Productivity Improvements Improving operations to drive performance High quality, low cost assets, BUT scope to improve operational performance Improved knowledge sharing across BUs Continuous improvement mindset and common asset optimisation practices Focus on key value drivers in each
Slide 11: 2. Core Growth (Platinum)
2. Core Growth (Platinum) Demand Driven by • Global leadership position Environmental Regulation – 40% share of global platinum supply – 30+ years of reserves plus extensive (oz 000's) 5000 resources 4500 Industrial 4000 Autocatalyst • Positive industry outlook 3500 – Demand driven by diesel 3000 au
Slide 12: 2. Core Growth (Diamonds)
2. Core Growth (Diamonds) • De Beers is the largest diamond producer and marketer with 38% market share (45% Anglo ownership) • Long term supply/demand characteristics very favourable • Significant project pipeline • Diamonds are a fundamental part of Anglo’s future 11 Anglo American plc
Slide 13: 2. Core Growth (Coal)
2. Core Growth (Coal) • A leading global coal producer Meeting Growing Coal Demand – #3 global seaborne thermal producer – Low cost operations in S. Africa, S. America, and Australia Production (Mt) 200 • Coal will play a critical role in meeting world energy demand 150 – 39% of electricity produced
Slide 14: 2. Core Growth (Base Metals)
2. Core Growth (Base Metals) • A major success story for Anglo – 2006 EBITDA of $4.2bn Continued China Demand 2006 Chinese demand for NI, Cu and Zn as 35% percentage of Global demand • World class, long life assets 30% 30% – Los Bronces, Collahuasi, 25% Skorpion 25% – 40 year reserve life 20% 18% •
Slide 15: 2. Core Growth (Iron Ore)
2. Core Growth (Iron Ore) • Successful recent entry into iron ore China Driving Iron Ore Demand 800,000 • Good future fundamentals – China demand for iron ore expected to 700,000 remain robust 600,000 500,000 • Extensive growth options with both 400,000 Kumba and MMX – Potential to double current pr
Slide 16: 2. Core Growth – Impact
2. Core Growth – Impact Potential production growth (2006-2011 CAGR) • $7bn of approved projects and 20% another $10-15bn under review 16% • Strong track record of delivering projects on time and at or below budget 7% 7% • Increasing market shares in all of our core segments 5% Platinum Coal Copper
Slide 17: 3. Accelerating Profitable Growth
3. Accelerating Profitable Growth • Assessing all prospects for value creation in a new world order • Evaluating opportunities to accelerate profitable growth organically and through M&A in existing and new business areas • MMX and Michiquillay acquisitions indicative of new, proactive approach – Al
Slide 18: 4. Culture and Management Model
4. Culture and Management Model Creating a stronger performance oriented culture • Create greater accountability with more quantifiable and stretching objectives • Reduce the number of management layers and clarifying roles & responsibilities for performance delivery • Upgrade management processes a
Slide 19: 4. Culture and Management Model
4. Culture and Management Model Simplified structure & lean processes A business Value-driven management manager focused on Integrated – “One Anglo” value maximisation, Dynamic/Proactive/Agile not an asset manager “Making it happen” mindset 18 Anglo American plc
Slide 20: 5. Safety
5. Safety • Well benchmarked safety framework in place • Clear vision of “zero harm” and simple principles being entrenched • Excellent safety peer review process in place • ISO 14001 and ISO 18001 in place at all major operations But… • Our fatality performance is unacceptable Now: • Build on the s
Slide 21: Summary
Summary Î Changing the way we operate Î Leveraging our unique asset base Î Delivering our tremendous growth potential Î Expanding beyond our existing footprint… …in a strongly supportive commodity cycle 20 Anglo American plc