Anglo American Preliminary Results 2018
21 February, 2019
Consistent performance improvements deliver 4% increase in underlying EBITDA to $9.2 billion.
Mark Cutifani, Chief Executive of Anglo American, said: “We are delivering improvements on a consistent basis, with a further 4% increase in underlying EBITDA to $9.2 billion. Our commitment to disciplined capital allocation has helped strengthen our balance sheet by more than $10 billion over three years, with net debt reduced to $2.8 billion at the end of 2018. This strong financial result derives from our continued productivity improvements in the underlying operations and better than expected prices for many of our products.
“No degree of financial performance is worth a life, however, and in 2018, five of our colleagues tragically died in workplace safety incidents. The safety of our people is always front of mind and our determination to reach and sustain zero harm is our most pressing challenge.
“Our focus on efficiency and productivity, including through our Operating Model implementation, is continuing to deliver benefits – in terms of both safety and financial returns. In 2018, we produced 10% more product on a copper equivalent basis from half the number of assets we had in 2012. As a result, our productivity(1) per employee has doubled, supporting a 12 percentage point increase in mining margin(2) to 42% and placing us amongst the leaders in the industry. Over that six-year period, we have delivered $4.6 billion of annual underlying EBITDA improvement in terms of costs and volumes, including $0.4 billion in 2018. Looking forward, we see significant further potential and by 2022, we are targeting an additional $3-4 billion annual underlying EBITDA run-rate improvement, relative to 2017.
“Anglo American is a resilient and highly competitive business with a clear asset-led strategy. What’s more, our world-class portfolio benefits from considerable organic growth options, particularly in those products that will supply a cleaner, more electrified world and that satisfy the consumer-led demands of a fast growing global middle-class. Our focus is on unlocking the very significant additional potential that we see within the business – from further productivity improvements, volume growth from existing and new operations, and the deployment of FutureSmart Mining™ technologies – and to do so safely and responsibly, maintaining strict capital discipline and creating a sustainable business in every sense.”
Financial highlights – year ended 31 December 2018
- Generated underlying EBITDA* of $9.2 billion, a 4% increase, and $3.2 billion of attributable free cash flow*
- Delivered profit attributable to equity shareholders of $3.5 billion, a 12% increase
- Reduced net debt* to $2.8 billion, a 37% reduction since 2017 – 0.3x net debt / underlying EBITDA
- Achieved net cost and volume improvements of $0.4 billion(3)
- Expected 2019 cost and volume improvements of $0.5 billion, and on track to deliver $3-4 billion annual EBITDA improvement by 2022, relative to 2017
- Proposed final dividend of $0.51 per share, equal to 40% of second half underlying earnings*
| Year ended US$ million, unless otherwise stated |
31 December 2018 | 31 December 2017 | Change |
|---|---|---|---|
| Revenue | 27,610 | 26,243 | 5% |
| Underlying EBITDA* | 9,161 | 8,823 | 4% |
| Underlying earnings* | 3,237 | 3,272 | (1)% |
| Attributable free cash flow* | 3,157 | 4,943 | (36)% |
| Profit attributable to equity shareholders of the Company | 3,549 | 3,166 | 12% |
| Underlying earnings per share* ($) | 2.55 | 2.57 | (1)% |
| Earnings per share ($) | 2.80 | 2.48 | 13% |
| Dividend per share ($) | 1.00 | 1.02 | (2)% |
| Group attributable ROCE* | 19% | 19% | – |
Terms with this symbol * are defined as Alternative Performance Measures (APMs). For more information on the APMs used by the Group, including definitions, please refer to page 63.
(1) Productivity indexed to 2012 benchmark.
(2) The mining margin represents the Group’s underlying EBITDA margin for the mining business. It excludes the impact of PGMs purchase of concentrate, third-party purchases made by De Beers, third-party trading activities performed by Marketing, the Eskom-tied South African domestic thermal coal business and reflects Debswana accounting treatment as a 50/50 joint venture.
(3) Excludes the impact of the suspension of operations at Minas-Rio.
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