Anglo American plc · LSE:AAL
Anglo American — Merrill Lynch Conference 2006
24 slides from Anglo American's conference presentation, May 2006
Slide 1: Anglo American: Creating Long Term Shareholder Value
ANGLO AMERICAN CREATING LONG TERM SHAREHOLDER VALUE Merrill Lynch Conference May 2006 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 Markets Act
Slide 2: A focused mining group (i) Overview
Anglo American A focused mining group (i) Overview 2 Anglo American plc
Slide 3: A focused mining group
A focused mining group Anglo American Base Industrial Ferrous Paper and Platinum Diamonds Coal Gold Metals minerals Metals Packaging Mondi to be Shareholding separated in AGA and listed on reduced to LSE in 41.8% 2006/2007 Precious metals and Bulk and Base Metals minerals 3 Anglo American plc
Slide 4: Strong operational performance
Strong operational performance • Compound annual growth rates EPS CAGR: 21% 300 EBITDA CAGR: 19% 250 DPS CAGR: 16% 200 150 100 1999 2000 2001 2002 2003 2004 2005 4 Anglo American plc
Slide 5: Share price performance
Share price performance 350 300 Anglo: +205% since listing 250 200 150 FTSE 100: (3%) since Anglo listing 100 50 0 5/24/1999 03/07/2000 12/19/2000 10/05/2001 7/24/2002 05/09/2003 2/20/2004 12/03/2004 9/21/2005 5 Anglo American plc
Slide 6: Strong balance sheet
Strong balance sheet Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Gearing¹ 14.4% 27.9% 32.0% 25.4% 17.0% EBITDA interest cover² 58.4x 50.5x 9.3x 18.5x 20.0x 8.6 8.2 5.6 $bn 5.0 2.0 Net Debt 2001 2002 2003 2004 2005 ¹ Net debt/Net Debt+Net Assets less investments in associates ² 2001-2003 EBITDA interest cover
Slide 7: Returns to shareholders
Returns to shareholders Total dividend up 29% to 90c per share in 2005 Special dividend of 33cps Buyback doubled to $2bn Buyback to date: $600m 7 Anglo American plc
Slide 8: A focused mining group (ii) Driving the growth
Anglo American A focused mining group (ii) Driving the growth 8 Anglo American plc
Slide 9: Delivering production growth
Delivering production growth 2000-2005 production growth Platinum +31% Diamonds +36% Copper +19% Zinc +105% Coal +45% 9 Anglo American plc
Slide 10: Future growth – strong project pipeline
Future growth – strong project pipeline Project pipeline $5.8bn of approved projects $10 -15bn of future projects MEREBANK SASA marine COLLAHUASI SADDLER’S $174m CREEK $52m CERREJÓN 2 EXPANSION Copper Coal ISIBONELO $43m INYANDA $65m SOUTH AFRICA MAFUBE MONASH ENERGY $30m TICOR 2 SISHEN SOUTH EXPANS
Slide 11: Base Metal projects
Base Metal projects • Barro Alto – feasibility study for 33ktpa nickel project to be completed and approval sought during 2006 US$1000m • Los Bronces - Potential expansion to over 400ktpa, FS underway for completion in 2007, permit applications in process US$750m • Collahuasi - Potential debottlenec
Slide 12: Further base metal project pipeline
Further base metal project pipeline • Gamsberg - New discovery at Gamsberg East 40m @ 7.7%Zn and 10g/tAg, further targets to be tested - US$1000m • Ore resources at Collahuasi are sufficient to further double copper production, active exploration programmes for water are in place • Strong greenfield
Slide 13: Platinum projects
Platinum projects 5 yr production growth Platinum: volume growth ahead • 2000-2005 (refined pt): production increased by 31% (CAGR – m oz of demand 5.5%) 3.4 Projects completed 3.2 3 - BRPM & JV with Royal Bafokeng - Polokwane 2.8 - Modikwa - ACP 2.6 2.4 - Western Limb Tailings - PMR expansion 2.2 P
Slide 14: Coal: significant project growth
Coal:significant project growth 5 yr production growth Coal: strong volume growth • 2000-2005: production increased by 45% mt 115 Projects under development 110 • Metallurgical coal capacity to increase by c.50% in next three years 105 100 • $835 million Dawson expansion on track 95 90 - Increases c
Slide 15: Iron ore growth strategy
Iron ore growth strategy Production set to increase from 33mtpa to 56mtpa in 5 years: 100 90 80 Faleme 70 Pellets Pre-Feasibility: 27.9 Mtpa Production (Mtpa) 60 SEP 2 Phase 1 Phoenix 50 SEP 1A Feasibility: 9.0 Mtpa Sishen South Ph 2 40 Sishen South Ph 1 Thabazimbi SEP 1 30 Scoped: 42 Mtpa 20 Sishen
Slide 16: Diamond project growth
Diamond project growth De Beers 5 yr production growth • 2000-2005: production increased by 36% Projects under development • $791m Victor project approved in August 2005 - 6m carats over the life of mine - Full production in 2009 • $513m Snap Lake project - 19m carats over the life of mine - Full pr
Slide 17: Capacity increases
Capacity increases • Long lead times Commissioning Pre Feasibility Feasibility Permitting Construction & ramp up Year 1 3 4 6½ 8 • Generally 4-6 years delay from decision to full production 17 Anglo American plc
Slide 18: Capacity increases
Capacity increases Skorpion production Zn price (nominal) Project Construction Production Design FS started approval started started capacity 110 16,000 100 14,000 90 12,000 Zn price (US$/lb) Zn production (t) 80 10,000 70 8,000 60 6,000 50 40 4,000 30 2,000 20 - Ja 5 Ja 4 Ja 9 Ja 0 Ja 1 Ja 2 Ja 3 0
Slide 19: A focused mining group (iii) Strategic update
Anglo American A focused mining group (iii) Strategic update 19 Anglo American plc
Slide 20: AngloGold Ashanti
AngloGold Ashanti Shareholding in AGA reduced from 50.8% to 41.8% Registered secondary offering of 16.3 million shares plus 3.4 million shares under a greenshoe option completed in April 2006 Proceeds of $973 million Shares sold at a 21.4% premium to price pre 26 October 2005 strategy announ
Slide 21: Strategic review: Mondi
Strategic review: Mondi Mondi to be listed in 2006/7 on LSE Separation options being explored Financial, legal and other preparatory work underway Support for growth options to be continued 21 Anglo American plc
Slide 22: Strategic review: Tarmac
Strategic review: Tarmac New structure and strengthened management team to drive improvements Focus on scale and leadership positions to deliver performance Intensive review well underway, phase one complete Growth and turnaround opportunities identified Sales of underperforming and non co
Slide 23: Strategic review
Strategic review Sale process proceeding Indicative bids received Short listed buyers currently completing due diligence Tongaat Hulett operating profit up 90% Tongaat Hulett Board announced: Hulamin to be unbundled and listed BEE equity participation to be introduced in both Tongaat-
Slide 24: Summary
Summary • Record operating performance in 2005 • One of the strongest project pipelines in the industry • Delivering on strategic restructuring • $2.5bn capital return to shareholders • Positive outlook for global economic prospects and metals 24 Anglo American plc