- Continuing delivery underpins 9% increase in underlying EBITDA to $10.0 billion
Mark Cutifani, Chief Executive of Anglo American, said: “We continue building on the fundamental structural and operational improvements we have embedded across our business. The result is founded on high quality, low cost, world class assets. We have also benefited from product and market diversification, with strong precious metals and iron ore prices offsetting weakness in diamonds and coal, generating a 9% increase in underlying EBITDA to $10.0 billion, a 19% ROCE and a Total Shareholder Return of 31% for the year.
“We continue to invest in high quality, value-adding growth projects across the business, including in copper, diamonds and metallurgical coal, which will drive our volume, margin and cash flow growth over the medium and longer term. Combined with our share buyback of $0.8 billion during the second half of the year, net debt at year end was less than 0.5x EBITDA and we continue to maintain a strong balance sheet through the cycle.
“The safety of our people is always front of mind. It is tragic that we continue to experience serious safety incidents, in which four of our employees died at managed operations in 2019. And while 2019 was our best safety performance in our history, our progress strengthens our determination to deliver on our commitment to zero harm. Across the business, we recorded another all-time low injury frequency rate, representing a 17% improvement compared to 2018 and a 59% improvement over the last six years.
“At the heart of our operational performance is the improving stability and predictability provided by our Operating Model. We are also starting to see considerable further efficiency and productivity benefits through our P101 programme to deliver additional value from our equipment, our key processes, and our FutureSmart Mining™ approach to technology, digitalisation and sustainability. Compared to 2012, our productivity(1) has more than doubled and unit costs have decreased by 29% (nominal basis), driving a 12 point increase in Mining EBITDA margin(2) to 42%.
“Underlying cost and volume benefits were $0.4 billion ? adjusted to $0.1 billion on a net basis to reflect external factors, including the drought in Chile and Eskom power disruptions in South Africa. Since 2012, we have delivered $4.7 billion of annual underlying EBITDA improvement and have the plans in place to add $3-4 billion of annual underlying EBITDA improvement by 2022, relative to 2017.
“Consistent delivery of underlying improvements continues to enhance Anglo American’s competitive position. We have transformed our operations and delivered significant financial uplift, while building our broad sustainability performance. Guided by our Purpose, we are continuing to reposition our business responsibly for a cleaner, greener, more sustainable world.”
Financial highlights – year ended 31 December 2019
•Generated underlying EBITDA* of $10.0 billion, a 9% increase, and $2.3 billion of attributable free cash flow*
•Delivered profit attributable to equity shareholders of $3.5 billion, in line with prior year
•Net debt* increased to $4.6 billion, equal to <0.5x underlying EBITDA, due to investment in growth opportunities
•Proposed final dividend of $0.47 per share, consistent with our 40% payout policy
•Previously announced share buyback of up to $1 billion: $0.8 billion completed by year end
Year ended in US$ million, unless otherwise stated
31 December 2019 31 December 2018 Change
Revenue
29,870 27,610 8%
Underlying EBITDA*
10,006 9,161 9%
Mining EBITDA margin*
42% 42%
Attributable free cash flow*
2,324 3,157 (26)%
Profit attributable to equity shareholders of the Company
3,547 3,549 0%
Underlying earnings per share* ($)
2.75 2.55 8%
Earnings per share ($)
2.81 2.80 0%
Dividend per share ($)
1.09 1.00
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 68 of the Preliminary Results PDF.
(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.
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