2018 Sustainable Development Roadshow. May 2018

Transcription

1 May 2018

2 Important notice concerning this document including forward looking statements 1 This document contains statements that are, or may be deemed to be, forward looking statements which are prospective in nature. These forward looking statements may be identified by the use of forward looking terminology, or the negative thereof such as outlook, "plans", "expects" or "does not expect", "is expected", "continues", "assumes", "is subject to", "budget", "scheduled", "estimates", "aims", "forecasts", "risks", "intends", "positioned", "predicts", "anticipates" or "does not anticipate", or "believes", or variations of such words or comparable terminology and phrases or statements that certain actions, events or results "may", "could", "should", shall, "would", "might" or "will" be taken, occur or be achieved. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Forward-looking statements are not based on historical facts, but rather on current predictions, expectations, beliefs, opinions, plans, objectives, goals, intentions and projections about future events, results of operations, prospects, financial condition and discussions of strategy. By their nature, forward looking statements involve known and unknown risks and uncertainties, many of which are beyond Glencore s control. Forward looking statements are not guarantees of future performance and may and often do differ materially from actual results. Important factors that could cause these uncertainties include, but are not limited to, those discussed in Glencore s Annual Report Neither Glencore nor any of its associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this document will actually occur. You are cautioned not to place undue reliance on these forward-looking statements which only speak as of the date of this document. Other than in accordance with its legal or regulatory obligations (including under the UK Listing Rules and the Listing Requirements of the Johannesburg Stock Exchange Limited), Glencore is not under any obligation and Glencore and its affiliates expressly disclaim any intention, obligation or undertaking to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. This document shall not, under any circumstances, create any implication that there has been no change in the business or affairs of Glencore since the date of this document or that the information contained herein is correct as at any time subsequent to its date. No statement in this document is intended as a profit forecast or a profit estimate and no statement in this document should be interpreted to mean that earnings per Glencore share for the current or future financial years would necessarily match or exceed the historical published earnings per Glencore share. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any securities. The making of this document does not constitute a recommendation regarding any securities. The companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal entities. In this document, Glencore, Glencore group and Group are used for convenience only where references are made to Glencore plc and its subsidiaries in general. These collective expressions are used for ease of reference only and do not imply any other relationship between the companies. Likewise, the words we, us and our are also used to refer collectively to members of the Group or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies.

3 Our strategy 2 Our main strategic objective is to sustainably grow total shareholder returns while maintaining a strong investment grade credit rating and acting as a responsible operator. To achieve this ambition, we are focusing on three strategic aims: Integration of sustainability throughout our business Key performance indicators: Safe and healthy workplace - TRIFR Environment: water, greenhouse gas emissions Long-term value for communities community investment spend Maintain a robust and flexible balance sheet Key performance indicators: Returns to shareholders: Funds from operations, Net funding and debt Value for our shareholders Adjusted EBIT/EBITDA, Net income attributable to equity holders Focus on cost control and operational efficiencies Key performance indicators: Returns to shareholders: Funds from operations, Net funding and debt Value for our shareholders Adjusted EBIT/EBITDA, Net income attributable to equity holders

4 2017 Financial Highlights 3 A record year Leading mine costs (1) Adjusted EBITDA Adjusted EBIT Marketing Adj. EBIT Net Income to equity holders Funds from operations +44% $14.8bn +118% $8.6bn +3% $3.0bn +319% $5.8bn +49% $11.6bn Net funding +1% $32.9bn Net debt -31% $10.7bn (4) Committed Avail. liquidity $12.9bn Cu 87c/lb Ni 191c/lb Marketing volumes (2) Cu 4.0Mt +14% Ni 204kt -8% Cobalt 42kt +8% Zn 2.8Mt +40% Ferroalloys 8.7Mt +14% T.Coal 106.3Mt +1% Zn -16c/lb 10c/lb ex Au Coal $32/t margin Pb 1.0Mt +11% Ali/Alu 10.7Mt -6% Crude Oil 1.2bnbbl +33% Conservative funding structure Committed available liquidity Bonds issued Bonds repaid Robust cash flow coverage ratios FFO to Net debt 108% +119% $12.9bn $2.0bn $4.4bn Net debt to Adj. EBITDA 0.72x -52% Acquisitions $1.6bn Partnerships (cash in) $1.0bn Distributions (3) Volcan voting shares Mutanda minority HG Storage Basecore Trevali Industrial Capex $4.0bn $1bn growth $3bn sustaining Recommended $1bn base from $2.9bn Marketing $1.9bn from Industrial Notes: (1) Refer slide 22 for calculation and reconciliation to reported Adjusted EBITDA. (2) Copper, zinc, and lead estimated metal unit contained in metal and concentrates (3) See slide 26 for calculation. (4) Excluding $0.7bn Net debt assumed as part of the Volcan transaction close to year end, refer to page 121 of the Preliminary Results Refer slide 14 for Volcan accounting treatment.

5 HSEC Approach 4 Oversight and responsibility for sustainable development rests with the HSEC Board Committee Its main responsibilities are to: Ensure appropriate Group policies are developed in line with our Values and Code of Conduct for the identification and management of current and emerging health, safety, environmental and community risks Ensure policies are effectively communicated internally and appropriate operational processes and procedures are developed to comply with these policies Evaluate the effectiveness of policy implementation and HSEC risk management Evaluate and oversee the quality and integrity of any reporting to external stakeholders concerning HSEC matters

6 2017 performance against our strategic priorities 5 HSEC pillar Strategic priority Strategic priority Strategic priority Safety No fatalities x 50% reduction of Group LTIFR 50% reduction in TRIFR by by the end of 2020, against 2020 using 2014 baseline of 2015 baseline of Health Environment Community and Human rights Product stewardship Year-on-year reduction in the number of new cases of occupational diseases No major or catastrophic environmental incidents Implement our social value creation strategy Ongoing engagement with organisations and interested Stakeholders on responsible sourcing 5% (minimum) carbon emission intensity reduction on 2016 baseline by 2020 Distribute Community Leadership Programme Toolkit to all assets High water risk assets to implement five-year water targets for No serious human rights incidents achieved X not achieved ongoing 1 Baseline figures include Glencore Agriculture

7 2017 Sustainability Performance Highlights 6 27% year-on-year decrease in LTIFR Zero major or catastrophic environmental incidents in % year-on-year decrease in new cases of occupational disease Rolled out the Community Leadership programme through regional Train the Trainer workshops Awarded a Level Four - Strategic Assessment by the Transition pathways Initiative 1.8 million tonnes reduction in Scope 1 and 2 CO 2 emissions First modern Slavery Statement published Zero serious human rights incidents $4bn tax and royalty payments

8 Catastrophic hazard management 7 Identification of technology as a solution to support behavioural change Developing a site-specific knowledge base of critical controls Building our knowledge of process safety management application opportunities Working with peers to present a common industry approach to reducing health and safety risks from operating and maintaining mobile mining equipment through engagement with equipment manufacturers Improving transportation safety in the DRC Our Mutanda copper operation in the DRC has identified employee transportation as a catastrophic hazard. It is mitigating this hazard through monitoring maintenance schedules and driver license renewal dates as well as using GPS tracking to assess bus drivers driving behavior, dispatch buses efficiently and coordinate buses to ensure that employees transportation is conducted in a safe manner.

9 Workplace health and safety 8 Board and senior management are committed to improving safety performance Nine fatalities in 2017 (three employees, six contractors) Dedicated programme to share learnings and best practice across operations Cross-commodity working group established to support first-level supervisors Continued focus on aligning contractors with the SafeWork programme Implementing a safety leadership programme During 2017 our coal business achieved its objective of zero fatalities. Its LTIFR and TRIFR improved by 20% and 28% respectively on 2016, exceeding its targeted reductions for the year. The business undertakes regular reviews to identify areas where it can further advance performance. In 2017, findings showed an inconsistency among frontline leaders in hazard recognition and risk assessments. To address this, the coal business developed and implemented Frontline Safety Leadership Plans.

10 Climate Change 9 Climate change embedded in our business planning 2020 target set at 5% below 2016, post 2020 being evaluated Adopting TCFD reporting methodology Delivered Aiming for A objectives Energy and climate scenarios used to evaluate business Supporting least cost carbon reduction Global energy demand drivers persist Growth and fossil fuels embedded in New Policies Coal central to SE Asian energy demand HELE technology and CCS are essential to deliver Paris targets Commodity mix and resource optionality key to Glencore Reducing emissions through CO-generation We successfully implemented an energy and carbon reduction project at our South African ferroalloys Boshoek Smelter. Carbon monoxide (CO) generation technology generates electricity from the heat of combusting waste CO from smelters through the production of carbon dioxide. The initial findings suggest that Boshoek could reduce its Scope 2 emissions each year by 8% or 60,000 tonnes GHG. Boshoek Smelter is considering the implementation of the technology at other South African smelters.

11 Water 10 Ongoing implementation of our strategic water management framework Water management guideline finalised Harmonisation of water reporting and alignment with the Water Accounting Framework of the Minerals Council of Australia 19 water-related complaints at 11 of our assets (2016: 73 complaints at 10 sites) Establishing participatory monitoring in Peru Antapaccay is located in Peru s Espinar province, an area of heavy natural mineralization. In Espinar, the water is naturally unfit for human consumption. The increasing local population, expanding farming activities, and limited infrastructure are creating stress on water availability. Antapaccay has implemented a number of participatory monitoring programmes with local communities. All participatory and company monitoring activities demonstrate that Antapaccay operates in line with Peruvian law.

12 Community and human rights 11 Training on the Voluntary Principles undertaken in Chad, Colombia, the DRC and Peru Asset-level self-assessments undertaken on our Human Rights Policy and grievance mechanisms guidance We continue to learn through our grievance mechanisms on how to better minimise and mitigate our impact on local communities $4 billion paid in taxes and royalties $90 million spent on community development Ongoing engagement with a broad range of NGOs

13 Committed to transparency 12 We continue to strengthen our public reporting and we are committed to a transparent approach in our communications and stakeholder engagement We are actively participating in the: EITI working group on commodity trading; and OECD working group on resource transparency Economic value added We pay all relevant taxes, royalties and levies required by local and national regulation in our host countries. The payments we make to the governments of the countries in which we operate include local, national, sales and employment taxes, government royalties and licence and permitting fees. In addition we contribute to local economies through our payments to suppliers, wages and employee benefits, voluntary support of socio-economic initiatives such as health and education projects and infrastructure development.

14 Compliance 13 Board and Audit Committee oversight Tone from the top Business Ethics Committee Comprises senior representatives Chaired by Group CEO Group compliance teams and 111 Compliance Coordinators worldwide Global and local compliance policies Regular training and screening Annual compliance confirmation 54,609 e-learning completions in 2017

15 Raising concerns 14 Glencore s corporate whistleblower programme Raising Concerns programme received 183 reports in 2017 (153 reports in 2016) Oversight by the Business Ethics Committee and the Audit Committee Available channels: , Webform, Toll-free numbers Code of Conduct enforcement: 284 employees dismissed in 2017 for breach of the Code

16 2018 priorities 15 Continue our focus on achieving zero fatalities Eliminate or mitigate catastrophic hazards across our operations Update water risk assessments to align with ICMM and ensure we capture societal considerations around shared access Formalise our human rights strategy Update our supply chain due diligence process to include a new standard to address responsible sourcing

17 Further information: Sustainability Report 2017 Sustainability Highlights Our Approach to Sustainability 2017 Climate Change Considerations for our Business 2017 Databook and GRI References 2017 Payments to Government Report 2017 Modern Slavery Statement

18 Appendix

19 Key information channels - online 18 Website Information on our material topics Climate change Modern Slavery Statement Payments to Government report UK gender pay gap Case studies and topical facebook.com/glencore Glencoreplc