Anglo American Plc · LSE:AAL
Anglo American — Merrill Lynch Global Metals & Mining Conference 2003
26 slides from Anglo American's conference presentation, May 15, 2003
Slide 1: Anglo American: Adding Value to Natural Resources
ANGLO AMERICAN ADDING VALUE TO NATURAL RESOURCES 15 May 2003 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 2000 (Financial Promotio
Slide 2: Unique Product Portfolio
Unique Product Portfolio A diverse mining & Forest natural resource Base Metals Products 19% group 4% Ferrous Unique exposure Metals Platinum 18% to precious metals 5% & diamonds Gold 11% Forest Products & Industrial Minerals Industrial Diamonds provide a steady Minerals 17% platform 12% Coal
Slide 3: Geographic Diversity
Geographic Diversity An Increasingly Balanced Asset Base 49% 48% 35% 22% Europe 11% 17% 21% 7% 2% 18% 6% 4% 9% 10% Rest of Africa Australasia Americas 54% Net operating assets 31% 32% Turnover by destination Headline earnings 14% % of shareholder base South Africa 3 Merrill Lynch Global Metals & Min
Slide 4: EPS: A Steady Performance
EPS: A Steady Performance US 140 cents 120 128 125 Consistent EPS 100 114 growth* 80 85 Progressive & sustainable dividend 60 yield 51.0 40 47.5 49.0 Dividend cover: 2.5x 37.5 20 Dividend yield: 3.4% 0 '99* '00* '01 '02 EPS DPS * 1999 & 2000 have not been restated for FRS19 4 Merrill Lynch G
Slide 5: Strong Cash Generation
Strong Cash Generation Inflow Outflow Expansionary capex $722m Taxation more than covered by AA plc cash inflows $732m Dividend Cash flow set to $3,618m SIB capital $810m expenditure increase with DBI debt reduction Expansionary $1,329m capital expenditure Cash flow from 1 operations 1 Cash flow
Slide 6: De Beers Cash Generation
De Beers Cash Generation 3500 3,152 De Beers senior debt at 3000 30/06/01: $3,550m 2500 Strong operating cash flow of $1.6bn in 2002 2000 1,716 To date $710m senior 1500 debt repaid & $710 1000 voluntary pre-payment 500 0 31/12/01 31/12/02 Net Debt (US$m) 6 Merrill Lynch Global Metals & Mining
Slide 7: Pre-tax Cost Savings: $279m
Pre-tax Cost Savings: $279m Maintenance $154m Admin & Overhead Labour Materials & Supplies $21m $4m $33m $77m $3m $48m $12m $2m $1m $96m $42m $45m $20m Operating Restructuring Procurement efficiencies & synergies 7 Merrill Lynch Global Metals & Mining Conference
Slide 8: Balance Sheet
Balance Sheet $m 31/12/2002 31/12/2001 Shareholders’ Funds 16,261 12,856 Net Debt/(Funds): South Africa 12 (1,571) Rest of World 5,566 5,578 3,589 2,018 Minority Interests 2,304 1,607 Total Capital 24,143 16,481 Net Debt/Total Capital 23.1% 12.2% ROCE 17.5% 19.0% EBITDA/Total Capital 23.6% 25.0% 8 M
Slide 9: The Path to Growth
The Path to Growth Rigorous capital allocation process Strong $6bn project pipeline $3.7bn in acquisitions in 2002 9 Merrill Lynch Global Metals & Mining Conference
Slide 10: Capital Allocation Process
Capital Allocation Process Investment Approval/ Strategy Evaluation Monitoring Opportunities Execution Capital allocation is a process of ongoing evaluation and continuous improvement We are constantly looking at innovative new approaches to ensuring optimal capital allocation within the Group 1
Slide 11: Capital Allocation Process
Capital Allocation Process Investment Approval/ Strategy Evaluation Monitoring Opportunities Execution Annual Board Projects and Projects / Investment Annual capex Review acquisitions acquisition Committee review concept agreed approves Continuously re- Existing Annual business with
Slide 12: Internal Growth: A Well-balanced $6bn Project Portfolio
Internal Growth A Well-balanced $6bn Project Portfolio PROJECT PIPELINE 2002 2003 2004 2005 - 6 RUSTENBURG MODIKWA ACP PROJECT RUSTENBURG RPM TAILINGS TWICKENHAM STYLDRIFT PLATINUM UG2 PHASE 1 $311M $250M UG2 PHASE 2 TREATMENT $343M MINE $203M $444M $186M $344M CRIPPLE CREEK MOAB KHOTSONG MPONENG TA
Slide 13: Strong Platinum Growth
Strong Platinum Growth Refined Pt Production oz (000’s) Anglo Platinum to 3500 expand annual production from 2.3m 3000 oz (‘02) to 3.5m oz (‘06) Supply / demand 2500 fundamentals continue to support strong 2000 production growth 1500 Further growth potential beyond 2006 1000 2002 2003 2004 200
Slide 14: Acquisitions in 2002
Acquisitions in 2002 Flexing Our Balance Sheet: $3.7bn in Acquisitions Durox & La Rochette other UK $110m $89m Syktyvkar $252m Mavike & other Europe Moly Cop $101m $105m Cerrejón Key: Moura & Base Metals Jellinbah East Ferrous Metals Disputada Anglo Plat. Forest Products $1.3bn $847m Industrial Mine
Slide 15: Acquisition Track Record
Acquisition Track Record Industrial Minerals - Tarmac acquired in November 1999 Fully integrated & delivering strong cash flows 1 EBITDA/Total Capital: 16% Australian/South American Coal Acquisitions - since 2000 Global coal asset base established EBITDA/Total Capital: 21% Syktyvkar -
Slide 16: Acquisition Track Record: Synergies
Acquisition Track Record Synergies Synergies realised realised Forecast Forecast Achieved Achieved Tarmac Tarmac $45m $45m pa pa $60m $60m pa pa Disputada Disputada $100m $100m NPV NPV On On Track Track Coal: Coal: Australia Australia $4m $4m pa pa $12m $12m pa pa 11 Coal: Coal: Cerrejón Cerrejón --
Slide 17: Adding Value to Natural Resources: What does it mean?
Adding Value to Natural Resources What does it mean? Renewed efforts across the Group to capture a greater portion of the value chain Many of Anglo’s businesses now involved in an array of value added products & services Includes branded goods & services as well as refining & smelting 17 Merrill
Slide 18: Value Added Products: Neusiedler
Value Added Products Neusiedler: A strong brand image A leading producer of high-grade papers for the desktop publishing market in Europe Ability to obtain premium prices for much of its production Mondi’s product range stretches from sophisticated packaging through paper to flexible packagi
Slide 19: Value Added Products: Tarmac
Value Added Products Tarmac: UK market leader in aggregates An unrivalled range of branded specialty asphalts Leading producer of ready- mixed concrete UK leader in dense & lightweight aggregate and aircrete blocks 19 Merrill Lynch Global Metals & Mining Conference
Slide 20: Value Added Products: Anglo Platinum
Value Added Products Anglo Platinum: Strategy of growing the market for platinum group metals A major supporter of the Platinum Guild International which drives platinum jewellery demand Fuel cells to be a major driver for long term platinum demand Anglo Platinum’s 17.5% stake in Johnson Mat
Slide 21: Value Added Products: De Beers
Value Added Products De Beers’ involvement in the diamond pipeline now extends from mining through to the end consumer. De Beers & LVMH recently joined forces to develop the De Beers name as a luxury brand, with the first store opening in December 2002. 21 Merrill Lynch Global Metals & Mining Co
Slide 22: SA Mining Legislation
SA Mining Legislation The Clouds are Beginning to Lift Minerals & Petroleum Resources Development Act signed and promulgated, will be effective at a future date Empowerment Charter & Scorecard finalised Money Bill published - consultation regarding royalties underway Anglo making good progre
Slide 23: Outlook
Outlook Outlook remains mixed Current global political, economic and currency uncertainties Continued strength of SA rand: Group unlikely to repeat record ‘02 performance Anglo’s commodity & geographic asset mix and strong project pipeline will underpin performance in years ahead 23 Merrill
Slide 24: Strategy
Strategy Ongoing focus on efficiencies, cost savings & innovation Seeking acquisitions that meet our investment criteria, including new markets Developing the value chain in our businesses & to improve focus on marketing & customer relationships Continuing with a balanced portfolio of greenf
Slide 25: Why Anglo?
Why Anglo? Product & geographic diversity Unique exposure to precious metals & diamonds Strength of project pipeline Strong cash generation Powerful balance sheet 25 Merrill Lynch Global Metals & Mining Conference
Slide 26: Anglo American: Adding Value to Natural Resources
ANGLO AMERICAN ADDING VALUE TO NATURAL RESOURCES 15 May 2003 Merrill Lynch Global Metals & Mining Conference
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