Anglo American plc · LSE:AAL
Anglo American — Merrill Lynch Conference 2008
20 slides from Anglo American's conference presentation, May 2008
Slide 1: Delivering our strategy
Delivering our strategy Merrill Lynch Conference Cynthia Carroll May 2008 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) of the Financial Services and Markets0Act 2000 (Finan
Slide 2: A global player
A global player Operations across 40+ countries Market Capitalisation: $90 billion FTSE 100 Ranking: 9th Base Metals Platinum Base Metals Diamonds Coal Diamonds Iron Ore Coal Coal Base Metals Base Metals Exploration Coal Activity Base Metals Diamonds Iron Ore Base Metals Base Metals Iron Ore Coal Pl
Slide 3: A strong 5 year performance
A strong 5 year performance ¾ Earnings per share: 30% CAGR ¾ Dividend per share: 18% CAGR ¾ Return on Capital Employed increased to 37.8% 37.8 4.40 32.4 3.73 2.58 19.2 1.87 14.6 10.7 1.20 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 Earnings per share (US $) ROCE (%) 2
Slide 4: Strong safety record = strong operating performance
Strong safety record = strong operating performance ¾ Step change in safety practices being applied ¾ Frequency of incidences trending down ¾ Continued drive towards zero-harm Simple Zero Mindset No Repeats non-negotiable standards 3
Slide 5: Agenda
Agenda 1 A focused mining group: completing our restructuring 2 Delivering our strategy 3 Why invest in Anglo American 4
Slide 6: Focusing Anglo
Focusing Anglo Targets set Exit holding Action taken Reduced from 41.6% to 16.6% Demerge Action taken Demerged in 2007 Sale of stake Action taken Sold in 2007 Operating profit Improve performance Action taken up 51% in 2007 Evaluating fit in portfolio Action taken Sale announced 5
Slide 7: Creating a focused mining group
Creating a focused mining group Old Anglo Platinum Diamonds Coal Base Iron Ferrous Industrial Gold Paper & Metals Ore Industries Minerals packaging New Anglo Platinum Diamonds Coal Iron Base Ore Metals 6
Slide 8: A unique portfolio across Precious, Bulks and Base
A unique portfolio across Precious, Bulks and Base ¾ Platinum - World’s largest producer ¾ Diamonds - World’s largest producer ¾ Coal - Leading producer ¾ Copper - Major producer ¾ Iron Ore - Developing significant footprint 15 45 South Africa 33 Precious Americas Bulk Rest of World Base 41 Other2 4
Slide 9: Delivering our strategy
Delivering our strategy 1 Cost and productivity improvements 2 Pursuing profitable growth opportunities Stronger performance culture & streamlined 3 management model 8
Slide 10: Major Optimisation underway: Initial $1 bn savings target
Major Optimisation underway: Initial $1 bn savings target Procurement Annualised savings of $950 m in 3 years Centralisation of global procurement function Shared Annualised savings of $50 m in 2 years Services Establishment of shared service centers Asset Delivering full potential of asse
Slide 11: Significant growth across core commodities
Significant growth across core commodities $43 bn group project pipeline $ bn 18 Capex for projects under evaluation 16 Capex in execution ¾ Steady flow of incremental 14 production expansion 12 ¾ All projects have scale and 10 are geographically spread 8 ¾ Positioned on lower half of 6 cash cost cu
Slide 12: Disciplined approach to M&A
Disciplined approach to M&A Our stringent criteria for assessing acquisition opportunities: ¾ Most attractive market segments ¾ Scale and growth options ¾ Low cash cost position ¾ Significant value creation potential 11
Slide 13: An example: Acquiring Minas-Rio
An example: Acquiring Minas-Rio ¾ Acquisition of world-class iron ore deposit ¾ Cost competitive position Amapá 2 ¾ Significant expansion potential Santana Port Minas Gerais ¾ Provides Anglo with c.10% seaborne iron ore market share by 2017 1 525km Slurry Pipeline Açu Rio de Janeiro State Port 12
Slide 14: The market leader in PGMs
The market leader in PGMs 2007 Gross sales revenue by metal (%) 8 10 Platinum ¾ Anglo Platinum the global leader with c.40% Palladium platinum market share 50 Rhodium 24 Nickel ¾ Targeting 5% CAGR in production Other ¾ Structural market deficit over past decade 8 supports strong growth in PGM profit
Slide 15: Base Metals: Significant growth underway
Base Metals: Significant growth underway Copper production to double in 5 years Nickel production to double in 3 years 1600 150 Development & Development & 1000 100 Conceptual Conceptual In execution In execution 600 50 Current production: 666 kt Current production: 45 kt 2008 2016 2008 2016 Attribu
Slide 16: Bulks: Rapid expansion in Iron Ore & Met Coal
Bulks: Rapid expansion in Iron Ore & Met Coal Iron Ore production to grow 5-fold Met coal production to increase 70% in 5 years in 2 years 160 40 Development & Development & Conceptual Conceptual 100 20 In execution In execution 50 12 Current production: 32.4 Current production: 11.2 2008 2016 2008
Slide 17: Sustainable growth underpinned by strong stakeholder engagement
Sustainable growth underpinned by strong stakeholder engagement ¾ Relations with South African government significantly uplifted ¾ 8 major BEE deals in 2007 ¾ New Order Mining rights announced ¾ Strategic relationship established with China Development Bank 16
Slide 18: From 'Old Anglo' to 'One Anglo'
From ‘Old Anglo’ to ‘One Anglo’ Limited co-operation Increased integration and between business units knowledge sharing Numerous standards and Common standards and policies policies Limited exploitation of Development of shared synergies services Major management changes announced ¾ New
Slide 19: Why invest in Anglo American
Why invest in Anglo American Unique portfolio Major cultural and $43 bn growth of assets across operational change pipeline precious, bulks, base underway Superior Value Growth Potential 18
Slide 20: Delivering our strategy
Delivering our strategy Merrill Lynch Conference Cynthia Carroll May 2008 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) of the Financial Services and Markets19Act 2000 (Fina