Sustained business performance delivers 19% increase in underlying EBITDA to $5.5 billion

Mark Cutifani, Chief Executive of Anglo American, said: “We are building on the improvements we have embedded across our business and benefiting from our diversification as stronger prices for certain products more than offset price weaknesses elsewhere, generating a 19% increase in underlying EBITDA to $5.5 billion and a 22% ROCE. The strength of our balance sheet and disciplined capital allocation support our investment in highly attractive organic growth while delivering a 27% dividend increase, in line with our 40% payout ratio, and our intention to return up to $1 billion through a share buyback.

“Our determination to reach and sustain zero harm is our most pressing challenge. No degree of financial performance is worth a life, however, and in the first six months of 2019, regrettably three of our colleagues died in workplace safety incidents, two of which were vehicle related. Two additional fatal transport incidents in Chile in late June and early July caused the loss of ten of our colleagues and are being urgently investigated. The safety of our people ‒ at work or travelling to and from home ‒ is paramount and we have instructed additional wide ranging measures, including with all those who provide transport services to us.

“Our focus on efficiency and productivity, driven by our Operating Model implementation, is continuing to deliver improvements. Compared to 2012, our productivity⁽¹⁾ per employee more than doubled, driving a 16 point increase in Mining EBITDA margin⁽²⁾ to 46% and placing us amongst the very best in the industry. We expect our targeted cost and volume benefit for 2019 ‒ adjusted to $0.4 billion to reflect our decision to pull back production at De Beers ‒ to come through in the second half of the year, building upon the $4.6 billion of annual underlying EBITDA improvement delivered since 2012. And looking ahead, we are committed to delivering the additional $3-4 billion annual underlying EBITDA run-rate improvement by 2022, relative to 2017.

“Anglo American is a resilient and highly competitive business with a clear asset-led strategy. Our focus is on unlocking the very significant additional potential that we see within the business ‒ and to do it safely and responsibly. Our world class portfolio benefits from a range of high margin, high return, fast payback organic growth options, sequenced over time, 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.”

Financial highlights – six months ended 30 June 2019

• Generated underlying EBITDA* of $5.5 billion, a 19% increase, and $1.3 billion of attributable free cash flow*
• Delivered profit attributable to equity shareholders of $1.9 billion, a 46% increase
• Net debt* increased to $3.4 billion following adoption of IFRS 16. Net debt of 0.3x underlying EBITDA
• Targeting full year 2019 cost and volume improvements of $0.4 billion ‒ adjusted for De Beers production
• Increased interim dividend of $0.62 per share, equal to 40% of first half underlying earnings*
• Share buyback ‒ intention to return up to $1 billion

(1) Productivity indexed to 2012 benchmark.
(2) The Mining EBITDA margin is derived from the Group’s Underlying EBITDA as a percentage of Group Revenue, adjusted to exclude certain items to better reflect the performance of the Group’s mining business. The Mining EBITDA margin reflects Debswana accounting treatment as a 50/50 joint operation, excludes third-party sales, purchases and trading and excludes Platinum Group Metals' purchase of concentrate.

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 61.

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