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ANGLO AMERICAN A WORLD OF DIFFERENCE

ANGLO AMERICAN A WORLD OF DIFFERENCE. 5 August 2004.

nicole-morton
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ANGLO AMERICAN A WORLD OF DIFFERENCE

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  1. ANGLO AMERICANA WORLD OFDIFFERENCE 5 August 2004 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 Promotion) Order 2001 (the “Order”) or (b) high net worth entities, and other persons to whom it may otherwise lawfully be communicated, falling within Article 49(1) of the Order (all such persons together being referred to as “relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents.

  2. Highlights • Record H1: - Earnings up 52% at $1,304m - EPS up 49% at 91c per share • EBITDA up by $1bn to $3,433m • Record performances from Base and Ferrous Metals • Cost cutting and efficiencies of $248m (2003:$127m) • Interim dividend up 27% at 19c per share

  3. Platinum Gold Diamonds Coal Base Metals Industrial Minerals Paper & Packaging Ferrous & Industries Headline earnings by business unit H1 2003 H1 2004 *NB:Headline earnings for Paper and Packaging have been adjusted for the 6 months ended 30 June 2003 as net interest for wholly owned operations in Paper and Packaging is now accounted for centrally within Corporate Activities

  4. Europe South Africa Americas Rest of World Geographic headline earnings mix H1 2003 H1 2004

  5. EBITDA – up 40% Strong cash generation into 2004

  6. The economic cycle - where are we? OECD industrial production % Source: MSU

  7. Falling inventories, rising prices Total LME inventories & MG base metals index LME inventories (kt) MG base metals MG base metals LME inventories (kt) MG Base Metal Index Cash – Price Index Nickel, Aluminium, Copper LME inventories Source: UBS

  8. H1:Robust commodity prices H1 2004 Coal * Copper Platinum Zinc H1 2003 Gold * API4 FOB Richards Bay Source: MSU

  9. Strategy for growth • Growth through projects • Growth through acquisitions • Value from cost cutting and efficiencies

  10. Anglo Platinum Diamonds AngloGold Ashanti Coal Base Metals Industrial Minerals Paper & Packaging Ferrous Metals Approved $6bn project portfolio Kleinkopje $56m Isibonelo $65m Buxton $173m Ticor 2 $54m Merebank $150m W.L. Tailings $186m Richards Bay $235m Skorpion $454m Finsch $130m Siguri $52m Cerrejón $17m El Soldado $80m Copebras $22m Black Mtn $110m HBMS 777 $276m Unki $84m Collahuasi $288m PMR Expan. $99m RPM Ph 2 $444m Ruzomberok $233m TauTona $52m Mponeng $191m ACP Project $250m BRPM $317m Kroondal $138m Ticor 1 $137m Twickenham $343m RPM Ph 1 $210m Dartbrook $55m Chagres $21m Grasstree $106m 2004 2005 2006 2007 Selected major authorised projects. 100% of subsidiaries and AA plc’s share of JV’s and associates. Full production dates.

  11. Anglo Platinum Diamonds AngloGold Ashanti Coal Base Metals Industrial Minerals Paper & Packaging Ferrous Metals Longer term unapproved project portfolio Rest of the World South America South Africa $2.0bn $2.6bn $2.5bn Quellaveco Copper (Peru) Pandora Hope Downs* Iron ore (Australia) Western Complex Obuasi Deeps (Ghana) Morro Sem Bone Nickel (Brazil) Gamsberg Zinc Dawson Valley (Australia) Barro Alto Nickel (Brazil) Lake Lindsay (Australia) Sishen South Iron ore Los Bronces expansion Copper (Chile) Sishen Expansion Iron ore Snap Lake (Canada) Collahuasi expansion Copper (Chile) *It is anticipated that final Kumba Board approval to proceed will be sought before the end of the year

  12. Actively managing the asset base H1 cash acquisitions and disposals ($bn) • Mining acquisitions for cash at current stage in the cycle unlikely • But opportunities in IMD/Paper & Packaging: • Acquisition of Frantschach minority • Sale of Gold Fields stake ($1.18bn)

  13. Cost savings and efficiency improvements: $248m $188m $60m

  14. REVIEW OF FINANCIALS Tony Lea

  15. Headline earnings $m H1 ’04 H1 ’03 Profit for the financial period 1,709 760 Exceptional items (535) 7 Amortisation of goodwill 112 98 Related tax & minority interests 18 (9) Headline earnings for the financial period 1,304 856 EPS (cents per share) 91 61 DPS (cents per share) 19 15 %ch 125% 52% 49% 27%

  16. Headline earnings variances $m

  17. Headline variance: Exchange Group total = -$216m $m

  18. Headline variance: Price Group total = +$866m $m

  19. Balance sheet $m 30/06/2004 31/12/2003 Shareholders’ Funds 22,531 19,772 Net Debt: South Africa 2,702 3,145 Rest of World 6,028 8,730 5,488 8,633 Minority Interests 4,160 3,396 Total Capital 35,421 31,801 Net Debt/Total Capital 24.6% 27.1% ROCE 13.7% 10.7% EBITDA/Total Capital 20.4% 17.3%

  20. Cash flow analysis H1 ‘04 H1 ‘03 EBITDA 3,433 2,444 Share of EBITDA of JVs & associates (938) (800) Increase in working capital (467) (375) Provisions & other non cash 47 17 Operating cash flow 2,075 1,286 Dividends from JVs & associates 147 203 Operating cash flow including dividends from JVs & associates 2,222 1,489 Net interest & other dividend income (140) (75) Taxation (246) (413) Disposal of fixed assets 56 40 Available cash flow 1,892 1,041 Dividends paid - company & minorities (686) (739) Net acquisitions & disposals 618 (315) Capital expenditure - maintenance (673) (547) - expansionary (724) (625) 427 (1,185) Other (524) (226) Increase in net debt (97) (1,411)

  21. REVIEW OF OPERATIONS Tony Trahar

  22. Higher prices, acquisitions and new projects boost performance Minera Sur Andes contributes $194m Commissioning of Collahuasi Rosario project ($654m) ahead of schedule and under budget Skorpion at 85% of design capacity - full production set for end 2004 ROCE (annualised) of 23.5% Highlights – Base Metals Headline earnings up 658% ($m)

  23. European markets impacted by strong Euro and slower growth Bauernfeind (€344m) and Frantschach minority (€320m) acquired Structure: creation of single global UCWF and packaging businesses Ruzomberok and Mondi SA expansions on track and within budget Previous reporting basis 2004: headline earnings of $174m (H1 2003: $178m*) Highlights – Paper and Packaging Headline earnings up 10% ($m) *NB:Headline earnings for Paper and Packaging have been adjusted for the 6 months ended 30 June 2003 as net interest for wholly owned operations in Paper and Packaging is now accounted for centrally within Corporate Archives

  24. Solid performance from De Beers DTC sales of $2.98bn up 2% Operating cashflow of $870m Net Debt (including preference shares) reduced by 34% to $1,169bn Preference share redemption of $175m US Department of Justice settlement in July Highlights – Diamonds Headline earnings down 13% ($m)

  25. Improved prices for iron ore, steel, manganese, ferrochrome and vanadium Strong performances from Highveld, Scaw and Samancor; improved results from Boart and Terra First fully consolidated contribution from Kumba Kumba: attractive iron ore growth opportunities Highlights – Ferrous Metals and Industries Headline earnings up 405% ($m)

  26. South African & South American earnings up significantly (+116%) Australian earnings impacted by A$ strength Moranbah – production resumption in H2 H2 realised prices higher than H1 Proposed Western Complex joint venture announced in May 2004 Drilling commenced on Xiwan Lease Area (China) on 1 July 2004 Highlights – Coal Headline earnings up 37% ($m)

  27. Revenues increased due to higher prices and greater sales volumes Platinum production up 26.6% at 1.16m oz (excluding pipeline movements, up 7.8%) Cost initiatives gain momentum Target of 2.45m oz in 2004 remains on track Highlights – Platinum Headline earnings up 30% ($m)

  28. Solid performance despite difficult UK markets Strengthening market conditions in Czech Republic and Poland Copebrás operating profit doubled due to market strength and contribution from new Goiás plant New Buxton cement plant (UK) operating at capacity Highlights – Industrial Minerals Headline earnings stable ($m)

  29. Lower earnings on the back of strong rand and lower production at Morila Cash costs of $260/oz AngloGold Ashanti transaction completed in April - integration of assets progressing well Acquisition of 29.9% stake in Trans-Siberian Gold Highlights – Gold Headline earnings down 20% ($m)

  30. Outlook • Positive global environment for commodities • US/Japan GDP growth encouraging • China set for soft landing? • European growth remains sluggish • Anglo’s product and geographic diversity to underpin performance

  31. ANGLO AMERICANADDING VALUE TONATURAL RESOURCES 5 August 2004 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 Promotion) Order 2001 (the “Order”) or (b) high net worth entities, and other persons to whom it may otherwise lawfully be communicated, falling within Article 49(1) of the Order (all such persons together being referred to as “relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents.

  32. ADDITIONAL INFORMATION Handout only

  33. Currency Conversion Ex-dividend (JSE) Ex-dividend (LSE) Record date Payment of Interim Dividend Annual Results 2 August 2004 16 August 2004 18 August 2004 20 August 2004 21 September 2004 23 February 2005 Key Dates

  34. $mH1 ‘04 H1 ‘03 Gold 401 349 Platinum 850 654 Palladium 248 207 Rhodium 696 557 Copper 125 75 Nickel 619 379 Zinc 48 35 Coal: thermal (RSA - API 4 index average) 49.15 25.75 Market Prices

  35. Headline Earnings Sensitivities US$m 10% change in gold price ± 36 10% change in platinum price ± 51 10% change in palladium price ± 7 10% change in coal price ± 81 10% change in copper price ± 77 10% change in nickel price ± 9 10% change in zinc price ± 20 10% change in pulp price ± 4 10% movement in SA rand/US$ ± 249 10% movement in AUD/US$ ± 29 10% movement in Euro/US$ ± 14 10% movement in £/US$ ± 17 Estimated sensitivities represent 6 month outlook. Excludes the effect of any hedging activities. Stated after tax at marginal rate. Pulp sensitivity depends on recoveries.

  36. Projects GoldLife of mine Production Full Approved Approved production1 commences prod. capex $m2 Mponeng 4.8m oz 2004 2007 191 TauTona - Expansion project 0.5m oz 2004 2006 52 TauTona - VCR A & Pillar & CLR <120L 2.4m oz 2005 2010 117 Moab Khotsong 4.9m oz 2003 2011 690 Siguri - CIP project 2.1m oz2005 52 Total 14.7m oz 1,102 Industrial MineralsTotal additional Production Full Approved Approved production3 commences prod. capex $m Buxton Cement Plant 500,000 t 2004 2004 173 Copebras 121,000 t 2005 2005 22 Total 195 1 Gold incremental production is total additional capacity over life of project. Capex converted to US$ on date of project approval. 2 Nominal. 3 Incremental production is a per year amount once full production is reached. Capex converted at date of project approval.

  37. Projects PlatinumTotal additional Full Approved Approved production1 prod. capex $m2 ACP Convertor Phase 1 2004 250 PMR Plant Expansion 2005 121 Rustenburg UG2 Phase 1 360,000 oz 2007 210 Bafokeng Rasimone Mine (BRPM) 250,000 oz 2005 317 W. Limb Tailings Retreatment 120,000 oz 2008 186 Rustenburg UG2 Phase 23 306,000 oz 2009 444 Twickenham 160,000 oz 2009 343 Kroondal 280,000 oz 2006 138 Unki 58,000 oz 2008 84 Total 2,093 Meet expansion 1 Incremental production is a per year amount once full production is reached. 2 Capex converted at date of project approval. 3 Replacement ounces.

  38. Projects CoalTotal additional Production Full Approved Approved production1 commences prod. capex $m2 Kleinkopje Expansion 1.3m tpa 2004 2004 56 Greenside Expansion 1.0m tpa 2003 2004 17 Cerrejón 2.0m tpa 2005 2007 17 Isibonelo 5.0m tpa 2005 2006 65 German Creek - Capcoal (Grasstree)2 3.9m tpa 2006 2006 106 Dartbrook (Kayuga) 3.7m tpa 2004 2004 55 Total 16.9m tpa 316 Base MetalsTotal additional Production Full Approved Approved production commences prod. capex $m HBMS 777 Project3 2003 2004 276 Black Mountain Deeps 2004 2006 110 Collahuasi Rosario Project 2004 2004 288 Skorpion 150,000 t Zn 2003 2004 454 El Soldado pit extension4 2008 2008 80 Codemin II 4,000 t Ni 2005 2005 67 Total 1,275 1 Incremental production is a per year amount once full production is reached. Capex converted at date of project approval. 2 To maintain & expand production levels at German Creek & Dartbrook. Incremental tonnes - German Creek (1.6m tpa) & Dartbrook (0.9m tpa). 3 Extends HBMS life to 2018. 4 Extends El Soldado life to 2027

  39. Projects Paper and PackagingTotal additional Production Full Approved Approved production1 commences prod. capex $m1 Ruzomberok: Pulp Mill 105,000 t 2004 2005 129 Ruzomberok: PM18 Expansion 100,000 t 2003 2004 104 Richards Bay: BEKP Line 145,000 t 2004 2005 235 Merebank: PM31 Rebuild 160,000 t 2005 2006 150 Total 618 Total converting Production Full Approved Approved capacity3 commences prod. capex $m Ybbstal: Flex 05 60,000 t³ 2004 2005 51 Total 51 1 Incremental production is a per year amount once full production is reached. Capex converted at date of project approval. 2 Made up of 20,000t pulp and 10,000t paper. 3 60,000 t increase in cut size capacity plus 16,000t additional production of UCWF paper.

  40. Projects DiamondsTotal additional Production Full Approved Current projects production1 commences prod. capex $m2 Finsch Block 4 17m carats 2004 2006 130 BB1E Cullinan 5m carats 2004 2007 12 Elizabeth Bay Upgrade 2m carats 2004 2004 27 Total 24m carats 169 Estimated Under review / awaiting approval capex $m2 C-Cut Cullinan 97m carats 2009 2014 473 C-Cut BA West Lower Cullinan 18m carats 2009 2012 45 Finsch Block 516m carats 2009 2010 180 Finsch Plant Upgrade 2m carats 2006 2007 32 Snap Lake 19m carats 2007 2008 282 Victor 6m carats 2008 2008 321 Total 158m carats 1,333 1 Total additional production shown for the life of the project. Shown on a 100% basis. 2 Approved capex is AA plc’s effective attributable share (48.65%).

  41. Projects Ferrous Metals and Industries Total additional Production Full Approved Approved production1 commences prod. capex $m1 Sishen – up current classifier 1 000 ktpa 2004 2004 13 Ticor: Mineral Sands Furnace 1 125 kt slag 2003 2006 137 Ticor: Mineral Sands Furnace 2 125 kt slag 2003 2007 54 Total 204 Estimated Awaiting approval capex $m Hope Downs 25 mtpa Sishen Expansion 10 mtpa - Sishen South 9 mtpa 300 • Incremental production is a per year amount once full production is reached. Capex converted at date of project approval.

  42. $mH1 ‘04 H1 ‘03 Platinum 139 107 Gold 66 82 Diamonds 217 248 Coal 147 107 Base Metals 455 60 Industrial Minerals 114 113 Paper and Packaging¹ 226 205 Ferrous Metals 207 41 Exploration (42) (39) Corporate Activities¹² (225) (68) Headline Earnings 1,304 856 Analysis of Headline Earnings ¹Headline earnings for Paper and Packaging have been adjusted for the 6 months ended 30 June 2003 as net interest for wholly owned operations in Paper and Packaging is now accounted for centrally within Corporate Activities ² Includes Gold Fields

  43. $mH1 ‘04 H1 ‘03 Platinum 320 204 Gold 133 180 Diamonds 350 378 Coal 196 172 Base Metals 565 98 Industrial Minerals 145 136 Paper and Packaging 320 357 Ferrous Metals and Industries 387 104 Exploration (56) (50) Corporate Activities1 (112) (45) Operating Profit2 2,248 1,534 Analysis of Operating Profit 1 includes Gold Fields. 2 after operating exceptional items.

  44. $mH1 ‘04 H1 ‘03 Platinum 292 394 Gold 227 117 Coal 64 74 Base Metals 127 155 Industrial Minerals 127 136 Paper and Packaging 409 233 Ferrous Metals and Industries 144 59 Other 7 4 Total 1,397 1,172 Capital Expenditure

  45. Headline variance: Volume Group total = +$75m $m

  46. Operating Profit Variance Operating profit after operating exceptional items $m

  47. $mH1 ‘04 H1 ‘03 South Africa 777 548 Rest of Africa 241 299 Europe 416 409 Americas 723 187 Australasia 91 91 2,248 1,534 Regional Analysis Operating profit

  48. Operating Cost Reconciliation Subsidiary & JV Operating Costs $m H1 2003 operating costs Subsidiaries (7,979) JVs (share of turnover less operating profit) (386) (8,365) Inflation (247) Exchange (945) Volume (279) Depreciation & amortisation (81) Structural changes (775) Operating impairments 12 Costs higher than inflation & other (176) H1 2004 operating costs before cost savings (10,856) Cost saving initiatives 248 H1 2004 Operating costs Subsidiaries (10,279) JVs (share of turnover less operating profit) (329) (10,608)

  49. $m IAS net profit (published) 217 STC adjustment (9) Movement on unrealised profit on FECs (9) Exploration 11 Profit on assets exchanged not recognised for UK GAAP (10) Net exceptional items 22 Weighted average exchange impact 3 Other 4 229 Minority interest (58) Depreciation on assets revalued on acquisition (32) UK GAAP contribution to headline earnings 139 Anglo Platinum Reconciliation

  50. $m IAS Headline earnings (published)1 111 Exploration (excluding joint ventures) 19 Amortisation on bond discount 5 Depreciation on assets revalued on acquisition (5) Minority interest (64) UK GAAP contribution to headline earnings 66 AngloGold Ashanti Reconciliation 1 Before unrealised non-hedge derivatives and fair value losses on interest rate swaps

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