Annual General Meeting 24 May 2017
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 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 2016 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 Disclosure and Transparency Rules of the UK Financial Conduct Authority and the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited 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. 2
Lydenburg ferrochrome smelter, South Africa Ivan Glasenberg Chief Executive Officer
2016 Highlights Strong financial performance • Adjusted EBITDA (1,2) of $10.3bn, up 18%; Adjusted EBIT (1,2) of $3.9bn, up 81% • Net income pre-significant items of $2bn, +48% • Funds from operations of $7.8bn, up 17% • Capital expenditure of $3.5bn, down 41% Underpinned by outstanding cost performance … • Full year operational unit cash cost performance in our key commodities: copper 87c/lb, zinc –5c/lb (16c/lb ex gold), nickel 265c/lb, and thermal coal $39/t at a $18/t margin • Lower copper, zinc and nickel cost structures expected to be sustained into 2017 along with expected higher coal margins … and the resilience of Marketing • Marketing Adjusted EBIT of $2.8bn, up 14% and above previous guidance of $2.5-$2.7bn. Supported by generally healthier market conditions across all business segments • 2017 guidance of $2.3bn - $2.6bn (previously $2.2bn - $2.5bn) - lower range reflects the sale of 50% of Glencore Agriculture in December 2016 September 2015 debt reduction plan complete • Net funding and Net debt reduced by $14.7bn & $14.1bn respectively over the past eighteen months to $32.6bn and $15.5bn • Cash flow coverage ratios significantly improved and repositioned to strong investment grade levels – FFO to Net debt: 50% – Net debt to Adjusted EBITDA: 1.51x Notes: (1) Refer to basis of preparation on page 6 of the Preliminary Results 2016. (2) Refer to note 2 pg 53 of the Preliminary Results 2016 for definition and reconciliation of Adjusted EBITDA/EBIT. 4
Safety • Sadly, two incidents at operations in the DRC and Zambia resulted in ten fatalities. • A further six incidents resulted in six fatalities • Board and senior management committed to improving safety performance • 2016 Performance milestones: • South America: first fatality free year • Agriculture: two years fatality free for the first time • Europe assets: two years fatality free for the first time • Kazzinc: one fatality in 26 months • Sinchi Wayra: 24 months fatality free • LTIFR, 1.40, 4% increase on 2015 • TRIFR, 4.05, 7% decrease on 2015 • c.154,000 employees and contractors at end of 2016 (1) • YTD 2 fatalities vs 8 in 2016 as at end of May Notes: 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 first rostered day absent after 5 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. (1) Includes 100% of Agricultural products
The right commodities for the future
Longer term fundamentals are more compelling: The commodities that fuel maturing economies are changing … Illustrative commodity intensity Glencore most exposed to mid • Not all commodities are curves (1) and late cycle commodities (2) equal, differentiation is increasingly important Mid cycle 100 • Key emerging markets are Diamonds, Thermal Coal, Commodities weighted by contribution to 2018F EBITDA maturing Cobalt, Oil/Gas, PGMs Agricultural products • The early cycle commodities that 80 Late cycle underpinned the supercycle boom in fixed asset investment are being displaced as demand 60 patterns shift in favour of mid and late cycle commodities in line with rising levels of income per capita Early cycle 40 • Our “Tier 1” commodity Copper, Zinc, Nickel, Iron Ore, Coking coal, portfolio of metals, thermal Aluminium, Lead coal and agricultural products is well placed to 20 Manganese benefit from this transition $US GDP per capita (real 2010) 0 0 5 10 15 20 25 30 35 40 45 50 GLEN Peer 1 Peer 2 Peer 3 Peer 4 Early Cycle Mid Cycle Late Cycle Notes: (1) Stylised intensity curves based on developed countries, indexed to 100 at maximum. (2) Source UBS, commodities weighted by contribution to 2018F EBITDA 7
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