Investor Update 3 December 2018

Transcription

1 Investor Update 3 December 2018

2 1 Important notice concerning this document including forward looking statements This document contains statements that are, or may be deemed to be, forward looking statements which are prospective in nature. These forward looking statements may be identified by the use of forward looking terminology, or the negative thereof such as outlook, "plans", "expects" or "does not expect", "is expected", "continues", "assumes", "is subject to", "budget", "scheduled", "estimates", "aims", "forecasts", "risks", "intends", "positioned", "predicts", "anticipates" or "does not anticipate", or "believes", or variations of such words or comparable terminology and phrases or statements that certain actions, events or results "may", "could", "should", shall, "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements are not based on historical facts, but rather on current predictions, expectations, beliefs, opinions, plans, objectives, goals, intentions and projections about future events, results of operations, prospects, financial condition and discussions of strategy. By their nature, forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond Glencore s control. Forward-looking statements are not guarantees of future performance and may and often do differ materially from actual results. Important factors that could cause these uncertainties include, but are not limited to, those disclosed in Glencore s 2017 Annual Report and 2018 Half-Year Report. For example, our future revenues from our assets, projects or mines will be based, in part, on the market price of the commodity products produced, which may vary significantly from current levels. These may materially affect the timing and feasibility of particular developments. Other factors include (without limitation) the ability to produce and transport products profitably, demand for our products, changes to the assumptions regarding the recoverable value of our tangible and intangible assets, the effect of foreign currency exchange rates on market prices and operating costs, and actions by governmental authorities, such as changes in taxation or regulation, and political uncertainty. Neither Glencore nor any of its associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this document will actually occur. You are cautioned not to place undue reliance on these forward-looking statements which only speak as of the date of this document. Except as required by applicable regulations or by law, Glencore is not under any obligation and Glencore and its affiliates expressly disclaim any intention, obligation or undertaking, to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. This document shall not, under any circumstances, create any implication that there has been no change in the business or affairs of Glencore since the date of this document or that the information contained herein is correct as at any time subsequent to its date. No statement in this document is intended as a profit forecast or a profit estimate and past performance cannot be relied on as a guide to future performance. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any securities. The companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal entities. In this document, Glencore, Glencore group and Group are used for convenience only where references are made to Glencore plc and its subsidiaries in general. These collective expressions are used for ease of reference only and do not imply any other relationship between the companies. Likewise, the words we, us and our are also used to refer collectively to members of the Group or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies.

3 Highlights Ivan Glasenberg - CEO

4 Highlights 3 Trade/China/Macro fears have impacted financial sentiment Sector reinvestment remains limited, demand is solid, inventories are low and likely to fall further Diversified portfolio enabling transition to low carbon economy, while providing access to affordable energy Our copper, nickel and cobalt helps underpin the technologies that enable the looming energy and mobility transformation Our affordable, premium quality, high-energy thermal coal helps support ongoing economic development in Asia Cash generative business model Resilient marketing business and low-cost industrial assets underpin through the cycle free cash flow generation of $5bn to $10bn (1) Spot illustrative free cash flow generation of c.$7.5bn from EBITDA of c.$17.1bn (2) Capital allocation Confidence in own business prospects and current share trading levels support near-term focus on deleveraging and shareholder returns/buybacks - $5.2bn of announced distributions/buybacks in equity cash flows, post base distribution, currently prioritized for buybacks/deleveraging Financial policy Commitment to strong BBB/Baa investment grade Targeting a maximum 2x Net debt/adjusted EBITDA through the cycle, augmented by a Net debt cap of c.$16bn Notes: (1) Slide 20 Illustrative spot free cash flow scenario analysis. (2) See Slide 19 for assumptions underlying spot illustrative cash flows

5 Commodity fundamentals still positive Despite trade/china/macro fears 4 Policy uncertainty is rising (1) and trade/china/macro fears are impacting sentiment (2) Global Economic Policy Uncertainty Index Feb-16 Oct-16 Jun-17 Feb-18 Oct-18 Manufacturing PMI Index Feb-16 Oct-16 Jun-17 Feb-18 Oct-18 Euro-Zone China USA Japan Notes: (1) Bloomberg, Economic Policy Uncertainty Index based on Current Price GDP Weights. Long-term average = 100. (2) Bloomberg

6 Commodity fundamentals still positive Despite trade/china/macro fears 5 Sector reinvestment remains limited (1) Sector capex ($bn) demand growth remains solid (2) 8.0% 6.0% Additional 2018 capex 4.0% Average: $43bn F 2019F 2020F 2021F 2022F 2.0% 0.0% Aluminium Copper Iron Ore Lead Nickel CAGR 2018F Thermal Coal Zinc Notes: (1) Company data, Morgan Stanley Research estimates, Morgan Stanley European Metals and Mining Tracker, 22 November (2) Company sources for Nickel, Wood Mackenzie Q3 Long-term Outlooks and monthly reports for Copper, Zinc, Lead, Iron Ore, CRU for Aluminium.

7 Commodity fundamentals still positive Despite trade/china/macro fears 6 and inventories significantly reduced (1) Global inventories (rebased 100=Jan 2015) 180 In 2019 continued inventory draw downs are likely (2,3) What s the minimum 2019 demand growth needed for inventory draw? 7.1% Copper 5.4% Minimum demand growth for continued inventory draw Days consumption Average High Low Today Copper Zinc Nickel Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Nickel Zinc CAGR Demand 2018F Demand 3.1% 2.7% 2.3% 1.0% 0.7% 0.1% -1.0% Nickel Zinc Copper Notes: (1) Inventories comprise various sources including LME, SHFE, Comex, Chinese bonded and non-bonded, Malaysian and Singapore warehouse stocks. (2) Glencore estimates for Nickel, Wood Mackenzie Q Long-Term outlook for zinc. Wood Mackenzie November Monthly Outlook for Copper. (3) See Slides 31,32,33 for underlying data.

8 ESG Update 7 Safety 12 fatalities from 11 incidents 2018YTD Fatality reviews undertaken and key focus areas identified LTIFR 1.03 increase of 0.8% vs TRIFR 3.31 increase of 7.2% vs Commitment to transparency $4.5bn paid in 2017 to governments (2) support the provision of public services and infrastructure in the countries where we operate We publish payments to governments on a project-byproject basis to enable greater transparency Diversified portfolio enabling transition to low-carbon economy while providing access to affordable energy Our copper, nickel and cobalt help underpin the technologies that enable the looming energy and mobility transformation We are a major supplier of affordable, premium quality high-energy thermal coal that will help support ongoing economic development in Asia Total recordable injury frequency rate (per million hours) (1) Glencore ICMM (27 companies) YTD Diversified commodity portfolio 2017 EBITDA (3) Battery Materials (Copper, Cobalt, Nickel) Coal Other (Zinc/Lead, Ferroalloys, Oil, Aluminium, Iron Ore, Agri Notes: (1) Lost time incidents (LTIs) are recorded when an employee or contractor is unable to work following an incident. LTIs are recorded when an incident results in lost days from the first rostered day absent after the day of injury. The day of the injury is not included. LTIFR is the total number of LTIs recorded per million working hours. LTIs do not include Restricted Work Injuries (RWI) and fatalities. TRIFR = Total sum of Fatalities, Lost Time Injuries, Restricted Work Injuries and Medical Treatment Injuries per million hours worked. (2) Payments to governments report (3) 2017 Group EBITDA

9 Maintaining financial strength and flexibility Steven Kalmin - CFO

10 Production update Overview 9 Group guidance own source (1) 2018F 2019F 2020F 2021F Δ F Copper Base (2) kt 1315 ± ± ± ± 30 Copper - Katanga guidance (3) kt ± ± ± 15 Copper - Group kt 1465 ± ± ± ± 45 +5% Cobalt - Base (2) 28 ± 2 31 ± 3 31 ± 5 30 ± 5 Cobalt - Katanga guidance (3) kt ± 2 32 ± 2 38 ± 2 Cobalt - Group kt 39 ± 2 57 ± 5 63 ± 7 68 ± 7 +74% Zinc (4) kt 1090 ± ± ± ± % Lead kt 285 ± ± ± ± % Nickel kt 126 ± ± ± ± 5 +10% Ferrochrome kt 1600 ± ± ± ± 30 +2% Coal Mt 132 ± ± ± ± 3 +10% Oil entitlement interest Mbbl 4.6 ± ± ± ± % Notes: (1) With the exception of nickel, 2018F production guidance from Third Quarter 2018 Production Report, Page 16. (2) 2019F, 2020F and 2021F copper and cobalt production outlook under review. (3) Katanga Mining Press release, 3 December 2018, Katanga Mining Announces Commissioning of Phase 2 of the whole ore leach plant and provides an operational update. (4) Excludes Volcan

11 Production update Copper/Cobalt 10 Key copper changes Overall net guidance reduction across the outlook period reflects a slower ramp up at Mopani (c.-20ktpa), the sale of Punitaqui (-8ktpa) and changes to Mutanda Mutanda Production profile currently under review (including Cu/Co scheduling mix) following drilling results that identified faster than expected transition to sulphide ores Undertaking analysis to determine the economics of developing the sulphide resource base taking into account anticipated capex/operating costs and regulatory regime including taxes and royalties Significant Cu/Co resource: 2017 M&I resources of 1.36% Cu and 0.5% Co (3), expected to be materially upgraded in 2018 R&R report Katanga Guidance reflects an annual ±15kt range around target levels of 300ktpy (4) 2019 cobalt production guidance reduced by 8kt to 26kt (4) to reflect cobalt plant ramp up and associated expected shorterterm recoveries Copper guidance (kt) own source (1,2) 1465± ± ± ± F 2019F 2020F 2021F Cobalt guidance (kt) own source (1,2) 68±7 63±7 57±5 39±2 2018F 2019F 2020F 2021F Notes: (1) 2018F production guidance from Third Quarter 2018 Production Report, Page 16. (2) 2019F, 2020F and 2021F copper and cobalt production outlook under review. (3) 2017 Reserves and Resources report. (4) Katanga Mining Press release, 3 December 2018, Katanga Mining Announces Commissioning of Phase 2 of the whole ore leach plant and provides an operational update

12 Production update Katanga WOL commissioning update 11 Hot commissioning of Phase 2 of whole ore leach (WOL) processing facility successfully completed (1) Progressive ramp-up of the plant underway with a view to full capacity of the WOL plant by end Q Copper from WOL Phase 2 Revised production profile KML Guidance 2018: 150kt Cu, 11kt Co 2019: 285kt ± 15kt Cu, 26kt Co ± 2kt Co 2020: 285kt ± 15kt Cu, 32kt Co ± 2kt Co 2021: 285kt ± 15kt Cu, 38kt Co ± 2kt Co Acid plant Earthworks complete and civil works have commenced Commissioning expected Q4 2019, first acid Q Cobalt exports Exports temporarily suspended following the appearance of uranium in the cobalt hydroxide Long-term solution in the form of an Ion Exchange plant is being reviewed. Planning to work with Gécamines to find alternative interim solutions Notes: (1) Katanga Mining Press release, 3 December 2018, Katanga Mining Announces Commissioning of Phase 2 of the whole ore leach plant and provides an operational update

13 Production update Coal 12 Key changes: Coal guidance (Mt) own source (2) 2019: +2Mt, 2020: +3Mt vs previous guidance (1) Hail Creek Acquisition completed early August c.10mt predominantly hard coking coal (100%; Glencore 82% interest). Re-design of the mine plan and shift to truck and shovel mining (from dragline operations) expected to generate c.$110m per annum reduction in costs, post restructure 132±2 +13Mt 145±3 145±3 145±3 Progress update HVO acquisition completed May c.15mt saleable semi-soft and high quality thermal coal (100%; Glencore 49% interest). c.$75m per annum reduction in spend identified to date Prodeco operations normalised from 2019 at c.17-18mt, following production impact from 2018 s prioritisation of overburden removal 2018F 2019F 2020F 2021F Australian coking coal Thermal coal (export) Australian semi-soft coal Thermal coal (domestic) Notes: (1) Investor update presentation, 12 December 2017, slide 17. (2) 2018F production guidance from Third Quarter 2018 Production Report, Page 16.

14 Production update Zinc 13 Key changes subject to market conditions: 2019: +35kt, 2020: +35kt vs previous guidance (1) Zinc guidance (kt) own source (2,3) +305kt McArthur River Recent EIS approval allows production of c.300ktpy from 2019 (2017 production of 210kt) 1195± ± ±30 Progress update Lady Loretta - restart H1 2018, full capacity expected from 2019, with mine life expected to 2023 Zhairem - c.160ktpy contained zinc; first production expected from 2020, with initial 14 year mine life Volcan (Peru) high potential mines in Peru s premier mining district. Integration focus to date on safety, mine efficiencies and organizational structure. Long-term focus on creating safe, world class, low-cost, high-margin assets 1090± F 2019F 2020F 2021F Kazzinc Australia North America South America Notes: (1) Investor update presentation, 12 December 2017, slide 17. (2) 2018F production guidance from Third Quarter 2018 Production Report, Page 16. (3) Excludes Volcan

15 Production update Nickel 14 Key changes: Nickel guidance (kt) own source (2) 2018 reduction of 6kt reflects timing of own unit feed processing at INO and slightly slower ramp up at KNS 2020: 2kt lower reflecting slower ramp at KNS 2021: slightly lower overall Ni unit production driven by INO production levels (subsequently recovers) Koniambo Operation of both furnace lines in 2018 Continued progress in site debottlenecking along with improved metallurgical plant technical capabilities in dual line operation Ramp up to full capacity expected by 2021/22 as previously guided 126±2 +12kt 138±5 140±5 138±5 Progress update INO Raglan Phase II and Onaping Depth mine extension projects on track for completion. Budgeted $1.2bn capex over Further upside potential at Norman West and Nickel Rim Depth with Vale 2018F 2019F 2020F 2021F INO Koniambo Murrin Murrin Notes: (1) Investor update presentation, 12 December 2017, slide 17. (2) 2018F production guidance from Third Quarter 2018 Production Report, Page 16.

16 2019 unit costs/margins 15 Robust unit cost / margin outlook (1) for our two largest Industrial businesses Copper and Coal. Nickel in transition mode with the achievement of commercial production at Koniambo Copper: 92 /lb improvement YoY with benefit of higher cobalt volumes more than offsetting lower by-product pricing/credits for 2019E. Spot FX assumptions for 2019E also supportive Zinc: 13 /lb (36 /lb ex Au) higher YoY volumes from Lady Loretta ramp-up more than offset by lower smelter contribution Nickel: 368 /lb majority of YoY cost increase reflects the addition of Koniambo with expectation of achieving commercial production (accounting term, whereby up to now all net costs have been capitalised, which will cease as of 1 January 2019) as well as lower by-product credits and higher costs at Murrin Murrin, in line with 2019 planned maintenance Coal: $40/t margin Modestly higher margin (+$1/t) reflects lower unit costs (the benefit of the Cost Out / Margin Up initiatives that have delivered >$450M of recurring benefits) more than offsetting assumed lower average realised price Cu costs (1,2) vs price (c/lb) Ex Katanga and Mopani in 2016/ Spot LME 2016A 2017A 2018E 2019E Ni costs (1,2) vs price (c/lb) Includes Koniambo A 2017A 2018E 2019E Spot LME Zn costs (1,2) vs price (c/lb) 95 Ex Au Ex Au Ex Au Spot LME Ex Au A 2017A 2018E 2019E Coal costs (1,2) vs margin ($/t) $103/t NEWC A 2017A 2018E 2019E Notes: (1) Disclosed cost is full cost including all cash costs and credits to allow reconciliation and generation of primary product illustrative EBITDA as per slide 19. See slide 9 for production volumes underlying 2019 full year cost guidance. (2) Spot LME price as at 30 November 2018.

17 Capex update guidance Industrial total capex average of c.$4.8bn per annum 16 Average c.$0.3bn p.a. uplift over Dec 2017 guidance Reinvestment in fast payback/high returning acquisitions/brownfield extension options Key capex changes include: Collahuasi copper (44%): c.$200m expected 170ktpd mill expansion, +c.18ktpa copper, >30% IRR Alen Gas Equatorial Guinea and Cameroon OAK field development: c.$150m combined LNG pipeline infrastructure for Alen gas phase, all projects <3yr payback Hail Creek coal acquisition: c.$200m capex over the period Mt Owen life extension: c.$220m additional 35Mt coal, first production 2021, >30% IRR. Main expenditure is new fleet in transition away from contract mining (opex will be commensurately lower) Integra extension: c.$70m access to 5 extra coking coal longwall blocks, >40% IRR Asturiana de Zinc new jumbo cell house: c.$40m higher efficiency/lower operating cost, c.25% IRR General inflation: c.$110m p.a. (energy, labour, consumables) Industrial total capex ($bn) (1) 2018F 2019F 2020F 2021F Exp capex: $1.4bn Exp capex: $1.4bn Exp capex: $1.1bn Exp capex: $1.0bn Guidance 2018 Guidance Industrial Capex history ($bn) pf 2012pf F 2020F $0.3bn* : Hail Creek, Integra, Alen Gas, Zhairem timing delay $0.9bn* : Collahuasi, some oil, Hail Creek, Mt Owen, Integra *Totals also include various existing project spend / timing differences Notes: (1) 2017 Guidance from Investor update presentation, 12 December 2017, Slide 11.

18 Marketing 2018 update 17 Marketing Adjusted EBIT guidance revised to $2.7bn ± $100M (1) Previous 2018 guidance expected to be within the top half of the $2.2bn to $3.2bn long-term guidance range Lowered guidance largely reflects the following second half impacts: Alumina basis risk impact relating to long-term % LME linked legacy sales contracts, being covered from index based alumina sourcing (rallied during the period in excess of the metal proxy % based hedging). The basis risk exposure reduces significantly from 2019 Cobalt some customer contractual non-performance amid weaker H2 pricing conditions and marketing impact from the time lag of internal Group purchase commitments (DRC), not perfectly matched back to back with sales activities (illiquid / immature derivative hedging tools available) Agricultural products in line with its increasing independence (guarantees now removed), governance and stand alone capital structure, GAL will no longer be proportionately consolidated (at 50%), in favour of retaining its associate accounting treatment. This is expected to reduce reported marketing 2018 EBIT by c.$100m (2) ; no net earnings impact Marketing Adjusted EBIT ($bn) Revised FY guidance 1.5 Notes: (1) Pre Agricultural Products reporting change, see below and Slide 26. (2) See Slide 26 for pro-forma adjustments to selected 2017 full year and 2018 half-year financials

19 Marketing 2019 guidance 18 Unchanged long-term guidance range of $2.2-$3.2bn for Marketing Adjusted EBIT Additional business/volume opportunities from recent M&A (Hail Creek, HVO, Chevron SA, Alesat) expected to offset the accounting impact on EBIT from discontinuation of proportionate consolidation (50%) of Agricultural Products in favour of associate reporting which recognises Glencore s lower share of GAL s net income 2019 Marketing Adjusted EBIT guidance expected to be around the mid-point of the $2.2-$3.2bn long-term range Long-term Marketing Adjusted EBIT guidance ($bn) Long-term guidance range: $2.2-$3.2bn As consistently commented, performance towards the top end of the long-term range requires the alignment of conditions for many/all commodities that reflect: Production/volume growth Tight/tightening physical market conditions Selective deployment of additional working capital Higher interest rates H1: $1.5bn F 2019+

20 2019 illustrative spot annualised cashflows 19 Group $bn Copper EBITDA 5.5 Zinc EBITDA 2.2 Nickel EBITDA 0.4 Coal EBITDA 5.8 Other Industrial EBITDA (1) 0.3 Marketing EBITDA (2) 2.9 Group EBITDA 17.1 Cash Taxes, Interest + other -4.5 Capex (3) -5.1 Illustrative spot free cash flow (4) 7.5 Copper (5) Guidance Nickel (6) Guidance Total copper production (kt) 1540 Production (kt) Cu from Zn & Ni departments. (kt) -140 Spot Ni price (c/lb) 505 Net relevant production (kt) 1400 Cost guidance (c/lb) -368 Realised Cu price (c/lb) 96% LME 271 Margin ($/lb) 137 Cost guidance (c/lb) -92 Margin ($/t) 3022 Margin ($/lb) 179 Spot annualised Adj. EBITDA ($M) 417 Margin ($/t) 3950 Spot annualised Adj. EBITDA ($M) 5530 Zinc (8) Guidance Total zinc production (kt) 1195 Coal (7) Guidance Zn from Cu department (kt) -105 Total coal (Mt) % payability (kt) -164 Average Cal19 NEWC price ($/t) Net relevant production (kt) 927 Portfolio mix adjustment Spot Zn price (c/lb) December 2018 ($/t) Cost guidance (c/lb) -13 Cost guidance (c/lb) Margin ($/lb) 107 Margin ($/t) 40.0 Margin ($/t) 2368 Spot annualised Adj. EBITDA ($M) 5800 Spot annualised Adj. EBITDA ($M) 2194 Notes: (1) Other industrial EBITDA includes Ferroalloys, Oil and Aluminium less c.$400m corporate SG&A. (2) Marketing Adjusted EBITDA of $2.85bn is calculated from the mid-point of the of the $2.2-$3.2bn EBIT guidance range plus $150M of Marketing D+A. (3) Industrial capex including JV capex plus marketing capex of c.$100m in 2019E. (4) Excludes working capital changes and distributions. (5) Copper spot annualised adjusted EBITDA calculated basis mid-point of 2019 production guidance Slide 9 adjusted for copper produced by other departments. Spot LME price as at 30 November 2018, less 4% discount reflecting payabilities on product mix. Costs include by-products, TC/RCs, freight, royalties and a credit for custom metallurgical EBITDA. (6) Nickel spot annualised adjusted EBITDA calculated basis mid-point of production guidance Slide 9. Spot LME price as at 30 November (7) Coal spot annualised adjusted EBITDA calculated basis mid-point of production guidance Slide 9. Spot NEWC price of $103/t, as at 30 November 2018, less $15/t portfolio mix adjustment and mine costs of $48/t (Slide 15) gives a $40/t margin to be applied across overall forecast group mid-point of production guidance of 145Mt (slide 9). (8) Zinc spot annualised adjusted EBITDA calculated basis mid-point of production guidance Slide 9 adjusted for zinc produced by other departments less adjustment for 85% payability. Spot LME price as at 30 November Cost includes credit for by-products and custom metallurgical EBITDA

21 Illustrative spot free cash flow scenario analysis (1) Free cash flow through the cycle: c.$5-10bn 20 Trough $3.6bn Downside $4.9bn Spot $7.5bn Upside $10bn Supercycle $14.4bn Unsustainable Through the cycle free cash flow $M Notes: (1) See slide 28 for underlying scenario assumptions

22 Capital allocation 21 Our capital allocation framework seeks to balance the preservation of our optimal capital structure, with attractive business reinvestment / growth opportunities and shareholder distributions 2018E distributions / buybacks total $5.2 bn $2.85bn base distribution, looking back at 2017 cash flows $0.3bn H share trust purchases (1) $2.0bn cumulative share buyback program Confidence in own business prospects and current share trading levels points to near-term focus on deleveraging and shareholder returns / buybacks 2019 distribution in respect of 2018 cash flows to reflect the current distribution policy of $1bn of marketing cash flows + a minimum of 25% of Industrial FCF Balance of 2019 equity cash flows prioritised for : Net funding - focus on selective RMI reduction, consistently targeting levels below $20bn (2) ; and Buybacks funded by cash generation Maintain strong BBB/Baa Equity cash flows M&A + Other Distributions / buybacks 2018 Half-Year Results Note: (1) See note 14, page 54, 2018 Half-Year Report. (2) ex Agricultural Products

23 Focusing on the long-term Ivan Glasenberg - CEO

24 Our Management structure Experienced management team with a proven track record of value creation 23 CEO Ivan Glasenberg CFO Steven Kalmin Head of Industrial Mining Assets Peter Freyberg Copper Marketing Nico Paraskevas Industrial Mike Ciricillo Zinc Marketing Daniel Maté Industrial Chris Eskdale Aluminium Marketing & Industrial Robin Scheiner David Streule Ferroalloys Marketing Jason Kluk Ruan Van Schalkwyk Industrial Japie Fullard Nickel Marketing Kenny Ives Industrial Marc Boissonneault Iron Ore Marketing & Industrial Jyothish George Coal Marketing Tor Peterson Industrial Gary Nagle Oil Marketing & Industrial Alex Beard Agriculture Marketing & Industrial Chris Mahoney Our functions structure CEO Ivan Glasenberg Board Audit Committee CFO Steven Kalmin General Counsel Shaun Teichner HR Gerda Schwindt IT Derek Wayland Michael Moore Sustainability Anna Krutikov Michael Farbach Stephen Eichstaedt Strategy Paul Smith IR and Communications Martin Fewings Risk Management Carlos Perezagua Internal Audit Nam Phong Ho Corporate development Treasury and trade finance Accounting Insurance Tax Procurement Legal Ethicsand Compliance IT IS Sustainable development HSEC assurance HSEC risk management Investor Update December 2018

25 Focusing on the long-term 24 Diversified portfolio enabling transition to low-carbon economy while providing access to affordable energy Our copper, nickel and cobalt helps underpin the technologies that enable the looming energy and mobility transformation Our affordable, premium quality, high-energy thermal coal helps support ongoing economic development in Asia Commodity fundamentals still positive Sector reinvestment remains limited, demand is solid, inventories are low and likely to fall further Cash generative business model Resilient marketing business and low-cost industrial assets underpin through the cycle free cash flow generation of $5bn to $10bn (1) Spot illustrative free cash flow generation of c.$7.5bn from EBITDA of c.$17.1bn (2) Confidence in our own business prospects vs current share price levels 2019 equity cash flows, post base distribution, currently prioritized for buybacks/deleveraging Notes: (1) Slide 20 Illustrative spot free cash flow scenario analysis. (2) See Slide 19 for assumptions underlying spot illustrative cash flows

26 Appendix

27 New reporting presentation for Agricultural Products 26 In line with the continued progression of Glencore Agricultural Limited s (GAL) independence since its sale in 2016, segmental reporting for GAL will no longer be proportionally consolidated, as of the 2018 financial year The results of GAL will be reported consistently with its statutory associate accounting treatment GAL is now fully independent of Glencore plc Previous financial guarantees have now been removed, governance has developed and stand alone funding secured. Glencore continues to guarantee the one remaining legacy Viterra bond maturing in August 2020 Less: Agri 50% 2017 H Add: Agri associate net income Less: Agri 50% Add: Agri associate net income Financial review Adjusted Financial review Adjusted Adjusted EBITDA 14,762 (316) 99 14,545 8,270 (109) 19 8,180 D&A (6,210) (6,086) (3,151) 62 - (3,089) Adjusted EBIT 8,552 (192) 99 8,459 5,119 (47) 19 5,091 Net finance and income tax expense in respect of material associates and JVs (591) 67 - (524) (281) 37 - (244) Net finance costs (1,451) - - (1,451) 746) - - (746) Income tax expense (1,572) 25 - (1,547) (932) 28 - (904) Non-controlling interests Income attributable to equity holders of the parent pre-significant items ,508 (99) 99 5,508 3, ,331 Significant items (517) Income attributable to equity holders of the parent - - (517) 5,777 (99) 99 5,777 2, ,814 Non-current borrowings 24,259 (282) - 23,977 23,839 (271) - 23,568 Current borrowings 10,875 (1,636) - 9,239 10,402 (1,666) - 8,736 Total borrowings 35,134 (1,918) - 33,216 34,241 (1,937) - 32,304 Less: cash and cash equivalents (2,236) 73 - (2,163) (2,347) 76 - (2,271) Net funding 32,898 (1,845) - 31,053 31,894 (1,861) - 30,033 Less: RMI (22,225) 1,388 - (20,837) (22,897) 1,606 - (21,291) Net debt 10,673 (457) - 10,216 8,997 (255) - 8,742 Net debt:adjusted EBITDA

28 2019 Key EBITDA sensitivities 27 Approximate estimated impact on FY2019 EBITDA given a change of: $M $100/t on copper price 140 $10/t on NEWC thermal coal price 480 $10/t on coking coal (HCC) price 60 $100/t on zinc price 130 $1000/t on nickel price 140 $1/lb on realized cobalt price 100 Australian (1c AUD/USD) operations 50 South African (1 ZAR/USD) operations 130 Chile (10 CLP/USD) operations 10 Canadian (1c CAD/USD) operations 10

29 Illustrative spot free cash flow scenario analysis Scenario assumptions 28 Trough (Q1 2016) Downside (FY 2016 ave.) Spot Upside Supercycle EBITDA $bn Free cash flow $bn Copper $/t Zinc $/t Nickel $/t Cobalt (realised) $/lb Thermal Coal (NEWC) $/t AUD ZAR CAD Total capex $bn

30 Listed entity market valuations and selection of other entities 29 Listed entities % owned Market value $M Russneft 25.0% 587 Volcan 23.3% (1) 515 Century 47.4% 374 Rusal 8.8% 371 Rosneft 0.6% 380 Yancoal 6.8% 215 Other (2) Various 333 Total 2744 Selection of other entities US oil infrastructure BaseCore (50% owned royalty company) American Zinc Recycling (10% owned) Notes: Market values as at November (1) Economic interest assumes no additional value to reflect majority holding in A shares. (2) Other includes Trevali Mining, Polymet, Recyclex, Aurelia Metals, Oz Minerals, Paranapanema and Merafe

31 Buy back update Shares eligible for distribution 30 $2bn announced buy backs 358,442,002 shares purchased to date for $1.45bn (1) Completion of the balance of program can run until close of dealings on 20 February 2019 Shares eligible for distribution (thousand shares): Shares eligible for distribution (million shares) Issued share capital Issued share capital (2) 14,586,200 Less Treasury shares November) (1) 519,901 Less Trust shares (2) 170,647 Shares eligible for distributions 13,895, Shares eligible for distribution issued share capital less treasury and trust shares FY14 H115 FY15 H116 FY16 H117 FY17 H118 12/18 Notes: (1)As at 30 November 2018, (2) Note 15, Page 160 Annual Report 2017

32 Commodity fundamentals: our key commodities have capacity to buffer a demand slow-down 31 Copper: demand growth has been resilient and inventory drawdowns persist in a slow-down Copper demand (kt) (1) Copper supply vs. demand scenarios (kt) (2) CAGR +2.7% +3.1% CAGR demand Supply Demand Inventory draw down 0.7% demand supply: +1.5% CAGR +1.1% supply growth YoY in F F 2019F 2020F Notes: (1) Source: Wood Mackenzie (2) Source: Wood Mackenzie, adjusted for new Company guidance

33 Commodity fundamentals: our key commodities have capacity to buffer a demand slow-down 32 Nickel demand growth has been strong inventory drawdowns likely to persist in a slow-down, even allowing for strong supply scenarios Nickel demand (kt) (1) Nickel supply vs. demand (kt) (1) +7.1% Supply Demand Inventory draw down CAGR demand CAGR +5.4% -1.0% demand supply: +6.5% CAGR +7.8% supply growth YoY in F F 2019F 2020F Notes: (1) Source: Glencore

34 Commodity fundamentals: our key commodities have capacity to buffer a demand slow-down 33 Zinc demand growth has been resilient (kt) (1) Zinc demand (kt) (1) inventory drawdowns are likely even with the potential of significant supply growth Zinc supply vs. demand (kt) (1) CAGR +2.3% +1.0% Supply Demand Inventory draw down CAGR demand 0.1% demand supply: +5.7% CAGR +8.6% supply growth YoY in F F 2019F 2020F Notes: (1) Source: Wood Mackenzie