2022 Annual Results: Script

Anglo American

2022 results

Thursday 23 February 2023

Anglo American 2022 Results	Thursday 23 February 2023

Introductory Comments

Stuart Chambers

Chairman, Anglo American plc

Slide 2 - Introductory comments

Good morning everyone and welcome to our 2022 full year results.

You will have seen our numbers go out a few hours ago, and before I hand you over to Duncan and Stephen to talk you through this set of results, I have a few remarks to make.

Firstly on Board changes - there have been two since I saw you at last July's half year results. Elisabeth Brinton, one of our non executive director's, stepped off the Board in September and Tony O'Neill stepped down at the end of last year before he retires in June. We are at an advanced stage in the appointment of a new non executive director and expect to announce this soon.

While this is our second best EBITDA ever, we are still not satisfied with our delivery in all areas.

The macro environment is undoubtedly more challenging - and I include weather in that, but in spite of such external and somewhat uncontrollable headwinds, there is still more we can do to increase our operational stability - and this will contribute to further improvement in our safety and our operational performance - which go hand-in-hand of course. Duncan will no doubt talk more about this.

Finally allow me to assure you all that the Board of Anglo American, as well as management, have a clear focus on safety and sustainability, and that we recognise the responsibilities we have to the full spectrum of our stakeholders.

Let me now hand you over to our CEO - Duncan.

2022 operating performance

Duncan Wanblad

CEO, Anglo American plc

Slide 3 - Cautionary statement

Thank you, Stuart. Good morning everyone and welcome.

Thanks for joining us in person and on the line. We always appreciate your time.

This slide is one for the lawyers.

Slide 4 - 2022 results agenda

You will be familiar with how we structure these presentations.

I will take you through our operating performance.

Stephen will then canter through the numbers.

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Anglo American 2022 Results	Thursday 23 February 2023

And then I will talk about how we are positioning the business for the longer term, as well as outlining the path forward for Woodsmith and why we are incredibly confident in both the project and the product.

Slide 5 - Safe & healthy operations are our first priority

Safety is our first priority. I am deeply saddened by the 2 fatalities due to incidents at our managed operations during the year and extremely disappointed to report a fatality last week at Kolomela.

As you know, we were dissatisfied with our TRIFR performance in the first half of this year. We responded with urgency and implemented a safety reset across the business. I am pleased that we saw a significant improvement in our performance during the second half and remain focused on carrying that momentum into 2023. December's rate was a very much improved 0.96 - but the recent fatality highlights that we still have much to do.

We have a consistent approach to safety, health and environment as we strive to achieve zero harm to both our people and the surrounding environment.

On Health, we had 5 new cases of occupational disease relating to noise-induced hearing loss. Near- term, our focus is on the execution of planned, rigorously risk-assessed work to reduce exposure.

And on the environment - we had one Level 3 water discharge incident towards the end of the year owing to extreme rainfall during the extended maintenance shutdown at the Polokwane smelter, fortunately with a low downstream impact, but nonetheless we must get to zero.

Slide 6 - Striving for a healthy environment & thriving communities

Looking at the key components of our environmental and social performance.

Our energy consumption in absolute terms decreased this year - despite Quellaveco starting up - that is largely a reflection of lower production at our PGM assets.

We saw a pleasing improvement in our scope 1 and 2 emissions, reflecting the transition from Grasstree to Aquila in our Steelmaking Coal business, as well as the renewable electricity contracts across our South America operations that kicked in at the start of 2022, and Quellaveco is the final one that will get under way during this year.

We continue to make progress on our longer term targets - and more to come on that shortly.

On our social performance - good progress on the implementation of our Social Way 3.0 management system, with 66% of foundational requirements implemented. Attaining this level of performance represents a higher bar than any that has been set before in the industry. The programme is a critical underpin to many of our ambitious 2030 Sustainable Mining Plan targets - such as 5 jobs offsite for every onsite job - demonstrating our commitment to partnering with our host communities and governments.

Slide 7 - 2022 summary

As a summary of the numbers, EBITDA of $14.5 billion and an EBITDA margin of 47%. In the face of significant cost pressure, this is testament to the quality and diversification of our portfolio.

As we talked about in December, production was slightly lower compared to 2021. We saw a significant step-up in the second half of the year, as we said, and I am confident that the focus on operational excellence and getting the basics right has put us in good shape to deliver on our guidance for 2023.

Unit costs were impacted by the combination of very high inflation as well as lower volumes. Stephen and I, and the broader GMC, are incredibly focused on those cost drivers.

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Anglo American 2022 Results	Thursday 23 February 2023

To reiterate, safe and stable operations are our number 1 and 2 priorities. We are absolutely determined to get both of those right.

So, overall a strong financial performance, but it could have been even better if we had hit all our marks.

Slide 8 - 2022 operating performance

Breaking that operating performance down into the business units:

De Beers had a good year. Operationally, performance was strong - coupled with the benefit of some high grade ore as we mined out the last of the Venetia open pit. That pit closed as planned in December and we are now transitioning to the underground operation. US markets were also strong, particularly in the first half of the year, but we are now seeing some Sightholder caution as a result of the weaker global economic outlook. Long term fundamentals continue to look very promising and I'm pleased with the provenance work the team have delivered this year as that plays in nicely to the underpinning demand themes we are seeing. The GRB remains an important partner and we are looking forward to refreshing that agreement. As you know Bruce transitions to co-chair and Al Cook has taken over as CEO this week.

In Base Metals - very pleased with the delivery of Quellaveco on time and on budget - contributing just over 100,000 tonnes of copper since start-up. It is testament to the project capabilities of Tom and the wider team. In Chile, great work in mitigating the water constraints at Los Bronces as well as the expected lower grades across the operations. The team has taken a number of steps to help manage the impact of the harder ore at Los Bronces and will continue to focus on opportunities through 2023. We also remain confident that we will reach a pragmatic solution on the Los Bronces integrated permit.

At PGMs, a more normalised operating performance following the benefit of having the ACP back up and running in 2021 and despite the impact of the lower grade at Mogalakwena. At Amandelbult we closed some higher cost areas of the mine and concentrators to focus on the lower cost areas. The Polokwane smelter rebuild completed in December as expected, and is now fully ramped up.

For Bulks it was a more challenging year. Both iron ore businesses were hit by wet weather. At Kumba, we continue to monitor the logistics performance closely. While at Minas, the initiatives to address the challenges in the ore characteristics are showing results. Finally, at Steelmaking Coal - we finished the year flat on 2021 but I am encouraged by work the team have done to work under these new operating parameters and I expect to see them optimise those processes further during the course of 2023.

All in all a decent performance and importantly, I'm encouraged that we are focused on the right things as we progress through this year.

Slide 9 - 2022 sustainability highlights

I covered the headlines of our environmental and social performance a moment ago - but that doesn't capture a lot of the great progress we have made towards our Sustainable Mining Plan targets.

On carbon:

• We launched our hydrogen truck prototype in the first half of 2022. Testing so far continues to yield positive results.
• We also announced the first 600MW of renewable energy projects out of our 3-5GW target as part of Envusa Energy, our renewable energy strategy in southern Africa. This has now been given status as a Strategic Integrated Project for South Africa, consolidating the government support for the programme. We are on track for construction to start this year.

In Chile, we secured desalinated water for more than 45% of Los Bronces' needs from 2025, while also providing clean water for local communities. For the second, as yet unapproved phase, we are planning an innovative water swap by exchanging that desal offtake for a larger offtake of industrial water. The local community get the clean water and we use 'dirty' water that would otherwise be discharged.

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Anglo American 2022 Results	Thursday 23 February 2023

The social contribution we make is perhaps one of the hardest elements of our ESG performance to measure. It can be the most powerful, though, in terms of the direct impact on improving people's lives. I am very proud of our work on building an inclusive workplace, including our focus on addressing gender- based violence, bullying, harassment and victimisation. We have now established our Living with Dignity Hub in South Africa - an independent support mechanism for our employees, contractors and their families. A similar facility is now in place in Australia.

The numbers

Stephen Pearce

Finance Director, Anglo American plc

Thanks Duncan. Morning all.

As usual, I would like to start with the key themes I want you to take away:

Firstly, despite some operating challenges this year that Duncan has touched on, we have delivered our second highest ever EBITDA performance for a full year. Through the second half of 2022, we have focused on efforts to deliver safe and consistent operational momentum and we are poised to continue that into 2023.

The second theme, we have a strong balance sheet and our 40% dividend pay-out is maintained (giving a yield of around 5%).

Finally, we continue to invest in value-adding growth that positions the portfolio for the two major demand drivers, while our technology and innovation programmes enable us to supply those metals and minerals in the most sustainable way.

Slide 11 - 2022 financial results

Turning to our 2022 performance:

EBITDA of $14.5bn - I'll unpack that for you a little more over the next two slides but healthy pricing helped to mitigate the impact of higher unit costs.

That gave an EPS of $4.97.

Reflecting our 40% pay-out policy, dividends were $1.98 per share, which results in $2.4bn of shareholder returns.

Net debt landed at $6.9bn - better than we expected in December as prices started to rise during the month, with ROCE for the year at 30%.

Slide 12 - Robust EBITDA & margins supported by strong pricing

Breaking that EBITDA performance down into the different businesses:

Diamonds

• Strong operational performance and healthy markets
• Full year EBITDA of $1.4bn
• 52% mining margin.
• 2023 - we are watching the macros carefully and the opening up of China
• 2022 holiday season was robust so while a lower sight 1, we remain hopeful things should pick- up as the year progresses

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