2002 Annual Results

2002 Annual Results

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.

ANGLO AMERICANADDING VALUE TO

NATURAL RESOURCES

28 February 2003

2002 Annual Results2

Record headline EPS of $1.25, up 10% on 2001

Headline earnings for the year $1,759m Cost & efficiency improvements of $279m Total dividend increased to 51 US cents

per share Strong EBITDA of $4.8bn: EBITDA

interest cover 20.0x*

Net Debt/Total Capital of 23.1% Obtained strong, single “A” credit ratings

All prior year figures restated for FRS19

Key Financials

2002

$1.25

2001

$1.14

Headline EPS

* Annualised


Minerals & Petroleum Resources Development Act signed and promulgated, will be effective at a future date

Empowerment Charter & Scorecard finalised

Money Bill still to be published

Anglo making good progress towards 5 year target of 15% HDSA involvement

To date Anglo American has undertaken› Over $1.8bn of black empowerment transactions in SA› Over $800m of procurement from black-owned businesses

SA Mining Legislation Update


Europe35%

SouthAfrica31%

31 December 200230 June 1999

Americas16%

SouthAfrica67%

Balanced Asset Mix

Net attributable operating assets, including investment in associates & JVs

Rest ofAfrica

2%

Europe14%

Australasia1%

Rest ofAfrica

7%

Americas21%

Australasia6%


SouthAfricaMining

42%

2002

SAOther12%

2001

SouthAfricaMining

54%SAOther18%

Headline Earnings

Australasia4%Americas

3%

Europe15%

Rest ofAfrica

6%

Rest of Africa11%

Europe22%

Americas9%

Australasia4%


Key:

Base Metals

Ferrous Metals

Forest Products

Industrial Minerals

Platinum

Coal

Gold

Gold Fields$252m

Moura & Jellinbah East

Syktyvkar$252m

La Rochette$110m

Mavike &other Europe

$101m

Kumba &Avmin$365m

Moly Cop$105m

Durox &other UK

$89m

Flexing Our Balance Sheet: $3.7bn in Acquisitions

Anglo Plat.$847m

Cerrejón

Acquisitions

Disputada$1.3bn

CerroVanguardia

$105m


Industrial Minerals - Tarmac acquired in November 1999 Fully integrated & delivering strong cash flows EBITDA/Total Capital: 16%1

Australian/South American Coal Acquisitions - since 2000 Global coal asset base established EBITDA/Total Capital: 21%

Syktyvkar - March 2002 Low cost producer integrated into European marketing network EBITDA/Total Capital: 33%2

Disputada - 13 November 2002 World class, low cost integrated copper producer Corporate offices integrated

Acquisition Track Record

1 EBITDA/Total Capital shown for Industrial Minerals as calculation for original Tarmac acquisition is not possible due to integration with previously held Industrial Minerals assets in the UK. Total Capital adjusted for projects in progress.2 Annualised.


2003 2004 2005 2006 2007 2008

Twickenham$343m

Major authorised projects. Full project list included in appendix. 100% of subsidiaries and AA plc’s share of JV’s and associates. Full production dates.

Key:

Base Metals

Diamonds

Forest Products

Industrial Minerals

Platinum

Coal

Gold

Cerrejón$50m

Styldrift$344m

Moab Khot.$419m

Polokwane$190m

Modikwa$311m

2009

CC&V$194m

Collahuasi$286m

ACP Project$250m

Skorpion$454m

Finsch$107m

Buxton$173m

Internal Growth

A Well-balanced $5.8bn Project Portfolio

RPM Ph 2$444m

HBMS 777$276m

RPM Ph 1$203m

RPM Tailings$186m

Mponeng$152m

Goiás$147m

Capcoal$107m

Ruzomberok$233m

BRPM$317m


A Steady Performance

Operating Margins

Total operating profit before exceptional items divided by turnover

2002

16.3%

1999

11.1%

2000

16.9%

2001

17.1%


Leading the way in anti-retroviral treatment provision for HIV/AIDS employees

Strong focus on safety leading to 39% reduction in fatal injury frequency rate & 42% reduction in LTIFR

Launch of ‘Good Citizenship: Our Business Principles’ across managed operations

Group continues to maintain significant corporate social investments & has strengthened management of relations with communities

Participation in international policy debates - WSSD, Global Mining Initiative, Extractive Industries Review, Extractive Industries Transparency Initiative

Social Responsibility

Review of FinancialsTony Lea

2002 Annual Results


2002 2001Headline EPS ($) 1.25 1.14

Headline earnings ($m) 1,759 1,681

Total dividend (US cents) 51 49

Average shares in issue 1,411m1,474m

EBITDA ($m) 4,792 4,647

Highlights 2002


$m 2002 2001Profit for the financial year 1,563 3,085

Operating exceptional items 81 513

Non-operating exceptional items (64) (2,148)

Profit for the year pre exceptionals 1,580 1,450

Amortisation of goodwill 189 167

Related tax & minority interests (10) 64

Headline earnings for the year 1,759 1,681

Headline Earnings


25

10206

(42)

(36)

(296)

1,759

(69)

2801,681

500

700

900

1,100

1,300

1,500

1,700

1,900

2001 Price Inflation Exchange Cost Interest Volume DBI Structural& Other

2002

$m

Headline Earnings Variances


22

24

30

(138)

2

(5)

(41)70

-50

0

50

100

150

200

IndustrialMinerals

ForestProducts

FerrousMetals

Industries Gold BaseMetals

Coal Platinum

$m

Headline Variance: Price

Group Total: -$36m


102

2314

34

30

21

0

50

100

150

200

250

ForestProducts

Platinum Coal Gold Industries FerrousMetals

BaseMetals

$m

Headline Variance: Volume

Group Total: +$206m


5

6

7

8

9

10

11

12

13

14

Jan-01

Mar-01

May-01

Jul-01

Sep-01

Nov-01

Jan-02

Mar-02

May-02

Jul-02

Sep-02

Nov-02

Jan-03

Rand/US$ Exchange Rate

R/$

11.96

8.58

Jan JanMar May Jul Sep Nov Mar May Jul Sep Nov Jan

2001 2002

7.58


$m

Conversion of local currency costs 273(weaker average rand – 10.48 vs 8.62)

Exchange losses on non-rand monetary assets(263)

(stronger closing rand – 8.58 vs 11.96)

Net exchange variance 10

Headline Variance: Exchange


Pre-tax Cost Savings: $279m

Operatingefficiencies

$154m

$96m

$33m

$21m

$4m

MaintenanceAdmin & Overhead

LabourMaterials & Supplies

Restructuring& synergies

$77m

$20m

$42m

$12m$3m

Procurement

$48m

$45m

$1m$2m


Balance Sheet

$m 31/12/2002 31/12/2001Shareholders’ Funds 16,261 12,856Net Debt/(Funds): South Africa 12 (1,571) Rest of World 5,566 5,578 3,589 2,018

Minority Interests 2,304 1,607Total Capital 24,143 16,481

Net Debt/Total Capital 23.1% 12.2%ROCE 17.5% 19.0%EBITDA/Total Capital 23.6% 25.0%


Cash Flow Analysis

2002 2001Net cash inflow from operating activities 3,618 3,539Net interest & dividend income 335 321Taxation (722) (637)Disposal of fixed assets 313 263Available cash flow 3,544 3,486Dividend paid - company & minorities (1,107) (1,168)Net acquisitions & disposals (3,717) 1,672Capital expenditure (2,139) (1,787)Other (141) (631)Movements in net (debt)/funds (3,560) 1,572Net debt at start of the period (2,018) (3,590)Net debt at end of the period (5,578) (2,018)


Cash Flow Analysis

1 Cash flow for subsidiaries, excludes associates & JVs

$1,329m

Cash flow fromoperations1

$810m

Expansionary capital expenditure

SIB capital expenditure

AA plc Dividend

Taxation

$732m

$722m

$3,618m

Inflow Outflow


Effective Tax Rate

Effective tax rate (pre-exceptionals) decreased from 36.4% in 2001 to 33.0% in 2002

Reduction in tax is primarily due to changes in the mix of contributions by divisions with differing effective tax rates

Adoption of FRS19 decreased headline earnings in 2002 by $166m (2001: $89m taken as a prior year adjustment)

Review of OperationsTony Trahar

2002 Annual Results


Headline earnings: $351m

Weaker results primarily due to lower palladium & rhodium prices

Refined Pt production up 7% to 2.25m ounces

Revised project suite on track to produce 3.5m refined platinum ounces per annum by end 2006

70.0% stake in Anglo Platinum; average cost of R371 per share since January 2001

Highlights - Platinum

2002

$351m

2001

$478m

Headline earnings down 27%


Highlights - Gold

2002

$205m

2001

$162m

Headline earnings up 27%


Cash costs reduced by 10% to $161/oz

Stake in Cerro Vanguardia (Argentina) doubled to 92.5%

Hedge book reduced by 4.3m ounces to 10.3m ounces

Gold production down 15% to 5.9m ozs due to sale of Free State assets

Average realised price*:2002: $303 /oz2001: $287 /oz

* Including realised non-hedge derivative gains


Highlights - Diamonds

2002

$324m

2001

$234m



DTC sales of $5.2bn up 16%

Stocks reduced by nearly $1bn

Solid Thanksgiving/Christmas retail sales in the US

EU approves Supplier of Choice

Free cash flow of $1,549m; net debt reduced by 46% to $1,716m in 2002

Further voluntary repayment of $355m in 2003


Highlights - Coal

2002

$266m

2001

$387m

Headline earnings down 31%


Lower export thermal coal prices offset by higher export coking coal prices (net impact -$41m)

Significantly impacted by stronger rand at 31 December 2002

Sales volumes increased 9% to 84.5m tonnes


Highlights - Base Metals

2002

$69m

2001

($18m)

$87m turnaround in performance


Improved financial performance despite lower copper & zinc prices

Acquisition of Disputada for $1.3bn completed in November 2002

Significant progress made in restructuring the business: Disposal of KCM, Tati Nickel, BCL,

Salobo and Kolwezi

Sale of stake in Anaconda Nickel in February 2003

Skorpion to be commissioned in 2003


Highlights - Industrial Minerals

2002

$231m

2001

$160m



EBITDA up by $89m to $468m

Tarmac improved margins despite mixed market conditions.

Improved performance at Copebrás

Buxton cement ($173m) & Copebrás phosphates ($147m) commissioning in 2003


Highlights - Forest Products

2002

$376m

2001

$272m



Strong performance in challenging markets

Successful integration of Syktyvkar and La Rochette acquisitions

Increased volumes from European and South African operations


2002

$88m

2001

$48m



Strong operating performances from Scaw, Highveld & Samancor

Memorandum of Understanding signed in December 2002 with SA Government on iron ore strategy

Stimela option over 10.5% of Kumba implemented

Accordingly, stake in Kumba increased to 20.1%, further 10% awaits SA Competition Tribunal approval

Highlights - Ferrous Metals


Outlook remains mixed

Current global political, economic and currency uncertainties

Possible military action in Iraq could see short term volatility

Anglo’s commodity & geographic asset mix and strong project pipeline will underpin performance in years ahead

Outlook


Ongoing focus on efficiencies & cost savings

Seeking acquisitions that meet our investment criteria, including new markets

Developing the value chain in our businesses & to improve focus on marketing & customer relationships

Continuing with a balanced portfolio of greenfield & brownfield projects - project pipeline of $5.8bn

Strategy

2002 Annual Results


NATURAL RESOURCES

28 February 2003

Additional Information Handout Only

2002 Annual Results


Key Dates

Currency Conversion

Ex-dividend (JSE)

Ex-dividend (LSE)

AGM

Payment of Final Dividend

Forest Products Site Visit

Interim Results

25 February 2003

10 March 2003

12 March 2003

25 April 2003

30 April 2003

18 - 20 June 2003

8 August 2003


2002 2001

Gold 310 272

Platinum 541 531

Palladium 336 597

Rhodium 838 1,606

Copper 71 72

Nickel 307 267

Zinc 35 41

Coal: thermal (RSA)* 26 30

Coal: coking (Aus)* 45 40

Market Prices

*Thermal & metallurgical coal prices are strictly indicative as wide variations occur in relation to region, product quality, contract volume and timing.


US$m

10% change in gold price ± 34

10% change in platinum price ± 51

10% change in palladium price ± 15

10% change in coal price ± 98

10% change in copper price ± 65

10% change in nickel price ± 16

10% change in zinc price ± 16

10% change in pulp price ± 6

10% movement in SA rand/US$ ± 124

10% movement in AUD/US$ ± 26

10% movement in Euro/US$ ± 44

Headline Earnings Sensitivities

Excludes the impact of translation of monetary assets & liabilities and the effect of any hedging activities. Stated after tax at marginal rate. Pulp sensitivity depends on recoveries.


1 Gold incremental production is total additional capacity over life of project. Capex converted to US$ on date of project approval.2 Incremental production is a per year amount once full production is reached. Capex converted at date of project approval.

Projects

Gold Total additional Production FullApproved

Approved production1 commences prod. capex $m

Mponeng 2.8m oz 2004 2005 152TauTona 2.7m oz 2004 2005 48Cripple Creek & Victor 2.8m oz 2002 2003 194Moab Khotsong 4.5m oz 2003 2008 419

Total 12.8m oz 813

Industrial Minerals Total additional Production FullApproved


Goiás (completed under budget) 455,000 t 2002 2003 147Buxton Cement Plant 425,000 t 2003 2004 173

Total 320


1 Incremental production is a per year amount once full production is reached. Capex converted at date of project approval.2 RPM - Rustenburg Platinum Mines

Projects

Platinum Total additional Production Full Approved


ACP Project Meet 2003 2004 250PMR Plant Expansion expansion 2002 2006 97Slag Cleaning Furnace requirements 2002 2003 30Rustenburg UG2 Phase 1 395,000 oz 2002 2005 203Rustenburg UG2 Phase 2 260,000 oz 2003 2007 444

RPM Tailings Treatment2

110,000 oz 2004 2005 186Styldrift Mine 245,000 oz 2006 2008 344Bafokeng Rasimone Mine (BRPM) 254,000 oz 1999 2004 317Modikwa Mine 162,000 oz 2002 2003 311Twickenham Mine 160,000 oz 2005 2005 343

Total 2,525

Polokwane Smelter 650,000 t 2003 2003 190 concentrate

Total 2,715


1 Incremental production is a per year amount once full production is reached. Capex converted at date of project approval. Capcoal project to maintain current production levels.2 Extends HBMS life to 2018

Projects

Coal Total additional Production Full Approved


SACE Expansion 1.3m tpa 2003 2004 50Greenside Expansion 1.0m tpa 2001 2003 17Cerrejón Sur feasibility 8Cerrejón 2.0m tpa 2004 2007 50Kriel South Project 5.1m tpa 2002 2007 70Capcoal 5.5m tpa 2005 2007 107

Total 14.9m tpa 302

Base Metals Total additional Production Full Approved

Approved production commences prod. capex $m

HBMS 777 Project2 2003 2004 276Black Mountain Deeps 45,000 t Zn 2004 2005 110Collahuasi Rosario Project 2002 2004 286Skorpion 150,000 t Zn 2003 2003 454

Total 1,126


1 Incremental production is a per year amount once full production is reached. Capex converted at date of project approval.

Projects

Forest Products Total additional Production Full Approved


Frantschach: Evap. Plant 8,000 t 2002 2003 10Frantschach: Steti PM3 20,000 t 2002 2003 20Ruzomberok: Mill Reconstruct. 105,000 t 2004 2005 129Ruzomberok: PM18 Expansion 100,000 t 2003 2004 104Neusiedler: PM4 5,000 t 2002 2003 8Merebank PM2 Rebuild 40,000 t 2003 2003 26

Total 297

Total converting Production FullApproved

Approved capacity commences prod. capex $m

Frantschach: Inncoat Foils 2003 2003 11Neusiedler: Sykt. Cutter 150,000 t 2003 2003 15Merebank A4 Cutter 92,000 t 2002 2003 12

Total 38


Projects

Diamonds Total additional Production Full Approved

Current projects production1

commences prod. capex $m

2

CTP Kimberley 20m carats 2002 2003 44!Gariep 3m carats 2004 2004 27Finsch Block 4 16m carats 2003 2006 107Venetia Upgrade 1.5m carats pa 2003 2004 3BB1E Premier 3m carats 2004 2007 10

Total 42m carats 191+1.5m pa Venetia

Under review

C-Cut Premier 110m carats 2007 2011 632Elizabeth Bay Upgrade 2m carats 2004 2004 21Finsch Tailings 6m carats 2004 2005 12Snap Lake 19m carats 2007 2008 207Victor 6m carats 2007 2008 272

Total 143m carats 1,144

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%), converted to US$ at R9.15=US$1, C$1=US$0.68


$m 2002 2001

Platinum 351 478Gold 205 162Diamonds 324 234Coal 266 387Base Metals 69 (18)Industrial Minerals 231 160Forest Products 376 272Ferrous Metals 88 48Industries 38 38Exploration (77) (85)Corporate Activities1 (112) (60)DB Investments - 65

Headline Earnings 1,759 1,681

Analysis of Headline Earnings

1 Includes Gold Fields earnings in 2002 of $27m. Prior to equity accounting dividends were included in Corporate


Headline Variance: Exchange

$mPlatinum 99 (131) (32)Gold 49 - 49Coal 28 (109) (81)Base Metals 21 (23) (2)Industrial Minerals 5 - 5Forest Products - 14 14Ferrous Metals 73 - 73Industries (4) (14) (18)Corporate Activities 2 - 2

273 (263) 10

Conversion of local currency results/costs

Translation of monetary

assets/liabilitiesActual

variance


$m 2002 2001

Platinum 802 1,345Gold 463 443Diamonds 541 373Coal 427 493Base Metals 82 (510)Industrial Minerals 277 201Forest Products 649 520Ferrous Metals 150 77Industries 114 114Exploration (93) (101)Corporate Activities1 (161) (170)

Operating Profit 3,251 2,785

Analysis of Operating Profit

1 Includes Gold Fields $41m in 2002 & Financial Services $2m in 2001.Operating profit after operating exceptional items


$m 2002 2001

Platinum 586 391Gold 246 243Coal 142 93Base Metals 346 446Industrial Minerals 363 205Forest Products 365 283Ferrous Metals 32 28Industries 53 65Other 6 33

Total 2,139 1,787

Capital Expenditure


Operating Profit Variance

184

188

168405

(518)

(250)

3,332

(143)

3,298

500

1,000

1,500

2,000

2,500

3,000

3,500

2001 Inflation Price Exchange Cost Volume DBI Structural& Other

2002

$m

Operating profit before operating exceptional items


Regional Analysis

Operating profit after operating exceptional items

Operating Profit$m 2002 2001

South Africa 1,790 2,269Rest of Africa 439 (121)Europe 583 371Americas 301 137Australasia 138 129

3,251 2,785


Operating Cost Reconciliation

Subsidiary & JV Operating Costs $m2001 operating costs

Subsidiaries (12,638)JVs (share of turnover less operating profit) (931) (13,569) Inflation (484) Exchange 138 Volume (288) Depreciation & amortisation (45) Acquisitions & disposals (7) Operating impairments 432 Aggregates levy & coal purchases1 (180) Other 392002 Operating costs before cost savings (13,964) Cost reduction initiatives 2792002 Operating costs

Subsidiaries (12,804)JVs (share of turnover less operating profit) (881) (13,685)

1 recovered through increased prices at Tarmac & revenues at Coal


$m

IAS net profit (published) 548STC adjustment 23 Movement on unrealised profit on FEC 8Exploration 14Exceptional items (10)Weighted average exchange impact 14

597Minority interest (214)Depreciation on assets revalued on acquisition (29)Other (3)

UK GAAP contribution to headline earnings 351

Anglo Platinum Reconciliation


$m

IAS Headline earnings (published)1

368Exploration 27Other 3

398Minority interest (193)

UK GAAP contribution to headline earnings 205

AngloGold Reconciliation

1 before unrealised non-hedge derivatives


$m Total Equity Non-equity

DBI headline earnings 570 - -UK GAAP adjustments 23 - -DBI headline earnings - UK GAAP 593 486 107

AA plc’s 45% equity interest 219 219 -Additional 3.65% effective equity interest 18 18 -AA plc’s portion of preference shares 87 - 87

AA plc headline earnings 324 237 87

De Beers Reconciliation


EBITDA Reconciliation

$m 2002 2001Net cash inflow from operating activities3,618 3,539Share of EBITDA of JVs & associates 1,303 991Working capital adjustments 2 138Differences in adjustments for (131) (21)exceptionals & non-cash EBITDA 4,792 4,647


EBITDA by Business: 2002

$m

PlatinumGoldDiamondsCoalBase MetalsIndustrial MineralsForest ProductsFerrous MetalsIndustriesOther

Total

Operating Profit(incl JVs

& Associates)

802463541427

82277649150114

(254)

3,251

EBITDA

926747594571330468909207208

(168)

4,792

ExcludeExceptional

Items

51

30

81

Add Back SubsidiariesDepreciation

107182

-104124142228

214212

962

Add Back JVs& Associates Depr. & Amort.

171533672

317354922

359

Add Back SubsidiariesAmortisation

1631

-41

4615

13

22

139


EBITDA by Business: 2001

$m

PlatinumGoldDiamondsCoalBase MetalsIndustrial MineralsForest ProductsFerrous MetalsIndustriesOther

Total

Operating Profit(incl JVs

& Associates)

1,345443373493

(510)201520

77114

(271)

2,785

EBITDA

1,442699428627183379752139212

(214)

4,647

ExcludeExceptional

Items

488

25

513

Add Back SubsidiariesDepreciation

77157

-108130136193

2546

9

881

Add Back JVs& Associates Depr. & Amort.

469552274

-263651

2

339

Add Back SubsidiariesAmortisation

1630

-41

4213

11

21

129

2002 Annual Results


NATURAL RESOURCES

28 February 2003

2002 Annual Results

Documents

Transcript of 2002 Annual Results