2020 Half-Year Results 6 August 2020
1 Important notice concerning this document including forward looking statements This document contains statements that are, or may be deemed to be, “forward looking statements” which are prospective in nat ure. 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 phr ases or statements that certain actions, events or results "may", "could", "should", “shall”, "would", "might" or "will" be taken, occur or be achieved. 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 disclosed in Glencore’s 2019 Annual Report. For example, our future revenues from our assets, projects or mines will be based, in part, on the market price of the commodity products produced, which may vary significantly from current levels. These may materially affect the timing and feasibility of particular developments. Other factors include (without limitation) the ability to produce and transport products profitably, demand for our products, changes to the assumptions regarding the recoverable value of our tangible and intangible assets, the effect of foreign currency exchange rates on market prices and operating costs, and actions by governmental authorities, such as changes in taxation or regulation, and political uncertainty. 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. Except as required by applicable regulations or by law, 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 past performance cannot be relied on as a guide to future performance. 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 companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal entities. In this do cument, “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 no t 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. 2020 Half-Year Results
2 Highlights Ivan Glasenberg – Chief Executive Officer 2020 Half-Year Results
2020 Half-Year Scorecard 3 Strong performance in challenging conditions Resilient cash generation … Group Adjusted EBITDA (1) of $4.8bn, down 13% in line with lower prices and some Covid-19 production/cost impacts, offset by a • strong marketing performance Cash generated by operating activities before working capital changes of $4.3bn, down 20% • Net capex cash flow of $1.7bn, down 22% (2) • Free cash flow up c.50% to $2bn • … supported by record Marketing results … Marketing Adjusted EBIT of $2bn, up 108% year-on-year, supported by favourable oil marketing conditions and normalisation of • metals earnings … and a solid operational performance in a challenging environment Most of our metals assets operated relatively normally: • Metals and Minerals EBITDA of $2.2bn, down 16%; mining margin of 26% (27% in H1 19) • Energy assets disproportionately impacted by lower coal prices: • Energy Products EBITDA of $0.7bn, down 65% • Full year costs/margins forecast in our key commodities: • Copper 106c/lb, zinc 5c/lb (48c/lb ex-gold), nickel 257c/lb (ex Koniambo) and thermal coal $46/t ($11/t margin). • Balance sheet Net debt of $19.7bn (including $1.9bn of IFRS 16 leases) temporarily higher in line with oil department working capital reset in a • substantially lower oil price and demand environment as well as initial margining required for additional oil carry trades Spot illustrative free cash flow generation of c.$4.1bn from EBITDA of c.$10.5bn (3) • Targeting Net debt to be within our $10-$16bn (4) preferred range (≥$2.8bn reduction) by year end, through such prioritising of • current healthy levels of cash flow generation Available committed liquidity of $10.2bn; bond maturities capped around $3bn in any given year • 2020 Half-Year Results Notes: (1) Refer basis of presentation on page 5 of the 2020 Half-Year report, refer to note 3 page 37 and Alternative Performance Measures page 69 for definition and reconciliation of Adjusted EBITDA/EBIT. (2) Net capex cash flow refers to Net purchase and sale of property, plant and equipment. (3) See calculation and footnotes on Slide 21. (4) Excluding IFRS 16 Marketing related lease liabilities ($0.9bn as at 30 June 2020).
Safety performance 4 We are progressing with an enhanced group- • wide fatality reduction program seeking to deliver a step-change in safety performance Identifying and targeting areas of • underperformance with clear plans and structures to deliver safe work places Ensuring SafeWork is fully implemented at • all sites Interventions where required • Improved investigations and follow through • Improved assurance for fatal and • catastrophic risk YTD 2020 performance: • 6 fatalities from 5 incidents • LTIFR 0.87, 13% improvement vs 2019 (3) • TRIFR 2.6, 8% improvement vs 2019 (3) • Notes: (1) Lost time incidents (LTIs) are recorded when an employee or contractor is unable to work following an incident. LTIs are recorded when an incident results in lost days from the 2020 Half-Year Results first rostered day absent after the day of injury. The day of the injury is not included. LTIFR is the total number of LTIs recorded per million working hours. LTIs do not include Restricted Work Injuries (RWI) and fatalities. TRIFR = Total sum of Fatalities, Lost Time Injuries, Restricted Work Injuries and Medical Treatment Injuries per million hours worked. (2) Data subject to final verification and may change. (3) Data to end June 2020.
Our commitment to the transition to a low-carbon economy 5 Aligning our business with a Paris compliant pathway (1) Our diversified portfolio of metals and minerals is 2019 Peer Scope 3 emissions (Million tonnes CO2-e) (2) well positioned to support the transition to a low- 600 carbon economy We are prioritising capital investments to align with • this transition, while maintaining strong operating 500 standards By aligning our capital investment decisions with 400 the goals of the Paris Agreement, we project a reduction of our Scope 3 emissions of 30% by 2035, primarily driven by a material depletion of our coal 300 portfolio In addition to considering the emissions from our 200 products, we continue to reduce our own operational carbon footprint 100 We have exceeded our current Scope 1 and 2 • target (3) , and will issue our next target by the end of this year 0 Peer 1 Glencore Peer 2 Peer 3 Peer 4 Notes: (1) RNS Furthering our commitment to the transition to a low-carbon economy, 20 February 2019, Preliminary Results 2019, Industrial activities capital expenditure, page 18, 2020 Half-Year Results RNS Glencore’s commitment to the transition to a low -carbon economy and Review of 2019 performance and Scope 3 emissions projection, 18 February 2020, Glencore Sustainability Report 2019, page 22. (2) Scope 3 emissions as reported on company websites. Peer 2 emissions are for 2018 as 2019 data is unavailable. (3) We have achieved a c.10% reduction in Scope 1 and 2 emissions intensity since 2016 – vs our target of 5%.
2020 Half-Year financial performance Steven Kalmin – Chief Financial Officer 2020 Half-Year Results
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