Preliminary Results February 2018

Transcription

1 21 February 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. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. 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 discussed in Glencore s 2016 Annual Report, which will be updated in the 2017 Annual Report that will be published in early March 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. Other than in accordance with its legal or regulatory obligations (including under the UK Listing Rules and the Disclosure and Transparency Rules of the UK Financial Conduct Authority and the Listing Requirements of the Johannesburg Stock Exchange Limited), 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 no statement in this document should be interpreted to mean that earnings per Glencore share for the current or future financial years would necessarily match or exceed the historical published earnings per Glencore share. 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 making of this document does not constitute a recommendation regarding 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 Chief Executive Officer Coal train from the Calenturitas mine, Prodeco, Colombia

4 2017 Highlights 3 Our strongest performance so far Adjusted EBITDA (1,2) of $14.8 billion, up 44%; Adjusted EBIT (1,2) of $8.6 billion, up 118% Net income attributable to equity holders of $5.8 billion, up 319% Funds from operations of $11.6 billion, up 49% Recommended 2018 distribution of $2.9 billion ($0.20c/share) (3) payable in two equal tranches (May/September) Marketing delivers again Marketing Adjusted EBIT of $3.0 billion, up 3% (up 10% like for like) (4) Strong performances from Metals and minerals and Energy products segments, up 28% and 9% respectively Broadly consistent like-for-like contribution from Agricultural products in difficult market conditions Another strong unit cost/margin performance has boosted our Industrial earnings Industrial EBITDA up 60% to $11.5 billion Mine unit cash costs/margins generally better year on year (Cu: 87c/lb, Zn: -16c/lb (10c/lb ex Au), Ni: 191c/lb, Coal: $32/t margin) Some emerging inflationary pressures and FX impacts more than offset by higher by-product credits Conviction to create value through partnerships, M&A and organic reinvestment Conservative financial policies underpin balance sheet strength and flexibility: Net debt of $10.7 billion (5) within $10-$16bn target range $1.6 billion invested in capital efficient growth (Volcan, Mutanda) (6) offset by $1.0 billion of cash in through partnerships (Trevali, HG Storage, BaseCore) Expansionary capex of $1 billion; total capex of $4.2 billion Notes: (1) Refer to basis of presentation on page 7 of the. (2) refer to note 2 page 55 and Alternative Performance Measures page 118 for definition and reconciliation of Adjusted EBITDA/EBIT. (3) See slide 26 for basis of calculation. (4) Like for like basis adjusts 2017 Marketing EBIT to 100% interest in Glencore Agriculture Limited. (5) Excluding $0.7bn Net debt assumed as part of the Volcan transaction close to year end, refer to page 121 of the. Refer slide 14 for Volcan accounting treatment. (6) HVO and Chevron South Africa announced in 2017, pending closure in 2018 subject to customary regulatory approvals.

5 Safety 4 Nine fatalities from nine incidents in 2017 Kazakhstan 2, Bolivia 2, South Africa 2, Zambia 1, Italy 1, Peru 1 Board and senior management committed to improving safety performance 2017 progress: Reduction in fatalities from 16 in st year without a multiple fatality incident African Copper: 1 fatality in 2017, lowest in history for this focus asset region 88% of our Assets (155 of 177) reported zero work-related fatalities in the last five years (2013 to 2017) LTIFR 1.02, 46% improvement vs 2013 baseline TRIFR 3.09, 62% improvement vs % reduction in New Occupational Disease cases compared to 2013 baseline c.146,000 employees and contractors at the end of 2017 (1) Total recordable injury frequency rate (per million hours) Glencore ICMM (23 companies) Notes: 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. (1) Excludes Glencore Agriculture Limited.

6 Financial performance Steven Kalmin Chief Financial Officer Copper anode, Mount Isa copper smelter, Australia

7 2017 Financial highlights 6 A record year Leading mine costs (1) Adjusted EBITDA Adjusted EBIT Marketing Adj. EBIT Net Income to equity holders Funds from operations +44% $14.8bn +118% $8.6bn +3% $3.0bn +319% $5.8bn +49% $11.6bn Net funding +1% $32.9bn Net debt -31% $10.7bn (4) Committed Avail. liquidity $12.9bn Cu 87c/lb Ni 191c/lb Marketing volumes (2) Cu 4.0Mt +14% Ni 204kt -8% Cobalt 42kt +8% Zn 2.8Mt +40% Ferroalloys 8.7Mt +14% T.Coal 106.3Mt +1% Zn -16c/lb 10c/lb ex Au Coal $32/t margin Pb 1.0Mt +11% Ali/Alu 10.7Mt -6% Crude Oil 1.2bnbbl +33% Conservative funding structure Committed available liquidity Bonds issued Bonds repaid Robust cash flow coverage ratios FFO to Net debt 108% +119% $12.9bn $2.0bn $4.4bn Net debt to Adj. EBITDA 0.72x -52% Acquisitions $1.6bn Partnerships (cash in) $1.0bn Distributions (3) Volcan voting shares Mutanda minority HG Storage Basecore Trevali Industrial Capex $4.0bn $1bn growth $3bn sustaining Recommended $1bn base from $2.9bn Marketing $1.9bn from Industrial Notes: (1) Refer slide 22 for calculation and reconciliation to reported Adjusted EBITDA. (2) Copper, zinc, and lead estimated metal unit contained in metal and concentrates (3) See slide 26 for calculation. (4) Excluding $0.7bn Net debt assumed as part of the Volcan transaction close to year end, refer to page 121 of the. Refer slide 14 for Volcan accounting treatment.

8 2017 Marketing Adjusted EBIT: $3.0bn 7 Strong marketing performance (+3% y/y, +10% like-for-like) (1) reflecting supportive conditions, in line with improved fundamentals for key commodities Metals and minerals Marketing Adjusted EBIT up 28% over 2016, with strong contributions from most commodity departments. Copper (including cobalt), zinc and nickel benefited from tightening market conditions while ferroalloys was helped by improved steel industry fundamentals Energy Products Up 9%, in line with solid contributions from both oil and coal. The oil result was aided by a meaningful increase in volumes while coal benefited from the continued impacts of Chinese supply restrictions and generally tighter supply conditions Agricultural Products (2) Like for like, Adjusted Marketing EBIT was down 26% compared to 2016, but up 7% at the Adjusted EBITDA level, due to a higher depreciation charge in Overall satisfactory result, given the general industry margin pressures. Following sale of a 50% interest in December 2016, reported Adjusted EBIT, was down 63% compared to 2016 Marketing Adjusted EBIT ($M) Metals and Minerals Energy Products Glencore Agriculture Corp and Other Notes: (1) Like for like basis adjusts 2017 Marketing EBIT to 100% interest in Glencore Agriculture Limited for full year. (2) The above data represent Glencore s interest in Glencore Agriculture Limited, being 49.9% post 1 December 2016, and 100% pre the sale date. Following the completion of the sale, the results from Agricultural products have been combined under Marketing activities and the 2016 comparatives (relating to Industrial 2016 EBITDA/EBIT of $138 million and $104 million respectively) have been reclassified from Industrial to Marketing activities. See page 32 and Note 2 of the.

9 E FY:$2.2 - $3.2bn 2018 guidance: Marketing continued delivery of stable cash flows 8 Forward Marketing EBIT guidance of $ bn Marketing Adjusted EBIT ($M) Continuation of current market conditions would suggest a 2018 performance in the upper-half of the range Achieving such upper end of the guidance range is lent support by a combination of: o Production/volume growth o Tight / tightening physical market conditions o Deployment of additional working capital vs. recent years o Higher interest rates Long-term guidance range: $2.2-$3.2bn Marketing: stable earnings with high cash conversion Earnings generated from the handling, blending, distribution and optimisation, in substantial scale, of physical commodities, augmented by arbitrage opportunities Highly diversified by commodity / geography Defensive but with upside in constructive marketing conditions Strong earnings base, low cost of capital and low capex intensity produce consistently high returns on equity Marketing earnings resilience (Indexed) Marketing Adjusted EBIT Indexed Industrial Adjusted EBITDA Indexed

10 2016 EBITDA Price Volume Cost Inflation FX Coal Hedging Other 2017 EBITDA 2017 Industrial Adjusted EBITDA up 60% to $11.5bn 9 Record Industrial performance with EBITDA up 60% to $11.5bn, reflecting higher commodity prices, offset by some weather and volume related impacts, moderate cost inflation and FX impacts in our key operating jurisdictions Metals and minerals EBITDA mining margin of 38% vs 33% in 2016 Adjusted EBITDA up 37%, in line with significantly higher prices (cobalt +108%, zinc +38% and copper +27%). Modest offset from lower production and the associated impact on costs, as well as the weaker US dollar against various producer currencies Energy Products EBITDA coal mining margin of 41% vs 31% in 2016 Adjusted EBITDA up 139%, reflecting higher year on year coal prices, up c.30-35%, offset by weather and strike related volume impacts and some inflationary cost pressures Industrial Adjusted EBITDA by segment ($M) 7, Industrial Adjusted EBITDA bridge ($M) , Metals and Minerals Energy Products Corp and Other Volume: Mutanda weather, Mopani power, Alumbrera end of mine variability, coal strikes, sale of Africa zinc Cost: including Australian coal strikes, higher royalties, lower grades at Antapaccay, and generally higher fuel and other energy costs FX: ZAR: -9%, KZT: -5%, AUD: -3%

11 Evolution of Industrial mining unit cash costs/margins 10 Strong 2017 mine cost/margin performances across the business reflected in flat/improved year on year costs/margins Modest inflationary pressures and unfavourable FX movements more than offset by higher by-product credits Further improvement being generally guided for 2018, basis January 2018 commodity prices, underpinned by volume growth, continued operational cost focus and higher by-product credits (1) Copper: 80c/lb: Higher volumes and cobalt and zinc by-product credits expected to more than offset modest USD cost and FX pressures Coal: $37/t margin: Improved margin reflects benefit of increased prices, partially offset by a higher blended portfolio unit cost calculation (revenue-linked royalties, FX impact from stronger producer currencies, higher fuel prices and product mix) and an increased portfolio mix adjustment that reflects divergence in pricing of non-newc coals. Nickel: 180c/lb: higher cobalt and copper by-product credits more than offset impact of declining PGM and copper grades in Sudbury. Koniambo operating costs continue to be capitalised until end 2018 Zinc: -31c/lb (-4c/lb ex Au): General inflation/fx pressures more than offset by higher lead, copper and gold credits Cu costs (2) vs price (c/lb) A 2016A 2017A 2018E Ni costs (2) vs price (c/lb) 324 (3) 643 (3) A 2016A 2017A 2018E Zn costs (2) vs price (c/lb) 161 (3) Ex Au Ex Au Ex Au A 2016A 2017A 2018E Coal costs (2) vs margin ($/t) A 2016A 2017A 2018E Notes: (1) By-product pricing as per January 2018 commodity prices. (2) Disclosed cost is full cost including all cash costs to allow reconciliation and generation of EBITDA as per slide 22. See slide 21 and 22 for production volumes underlying 2018 full year cost guidance. (3) Spot cash LME as at 16 February 2018.

12 pf 2010pf 2011pf 2012pf 2013pf Industrial Capex $4bn in 2017, c.$4.5bn annual average Industrial capex of $4bn, in line with earlier guidance Industrial capex ($bn) $3bn sustaining capex; $1bn expansionary capex Expansionary capex focused on Katanga, Mopani and Koniambo Sustaining capex: average c.$3.3bn Key capex additions by commodity: Coal: HVO acquisition Oil: Chad West drilling programme Expansionary capex: average c.$1.2bn Key capex highlights/additions by commodity: Copper: Collahuasi and Antamina optimisation, Katanga acid plant/cobalt process improvements, Mopani Zinc: Zhairem Nickel: Raglan Phase II, Onaping Depth, Sudbury Process Gas Industrial Capex ($bn) By segment ($bn) Coal: United OC 2018E 2019E 2020E Sustaining Expansionary 2018E 2019E 2020E Minerals and Metals Energy

13 Conservative financial policies guide balance sheet strength and flexibility 12 Conservative capital and financial structure Committed available liquidity of $12.9bn at 31 December Issued $2bn of bonds with maturities of 5 and 10 years. Post 2018 maturities capped at c.$3bn in any one year Repaid $4.4bn of maturing bonds Commitment to strong BBB/Baa Investment Grade Targeting a maximum 2x Net debt/adjusted EBITDA through the cycle, augmented by an upper Net debt cap of c.$16bn Net funding of $32.9bn and Net debt of $10.7bn at year end (1) RMI (2) up $5.1bn, primarily due to significantly higher commodity prices, and to a lesser extent, deploying additional inventory funding to seize attractive risk-adjusted marketing opportunities/returns Robust cash flow coverage ratios at 31 December: FFO to Net Debt of 108% Net debt to Adjusted EBITDA of 0.72x Optimised capital structure provides less risk, more flexibility and stability of distributions Net funding ($ billion) FFO to Net debt 108% 74% 50% 33% 28% 30%26% 29% 29% 25% Net debt ($ billion) (1) Net debt to Adj. EBITDA Targeting maximum 2x augmented by Net debt cap of c.$16bn 1.5 Manage around Net debt cap of c.$16bn Notes: (1) Excluding $0.7bn Net debt assumed as part of the Volcan transaction close to year end, refer to page 121 of the. Refer slide 14 for Volcan accounting treatment. (2) See Alternative Performance Measures pg 121 of the.

14 Capital allocation 13 Capital allocation framework seeks to balance the preservation of our optimal capital structure, with attractive business reinvestment / growth opportunities and shareholder distributions 2017 capital allocation: -$1.0bn fixed base distribution paid, -$1.6bn acquisitions, +$1.0bn disposals, $4.8bn Net debt reduction towards lower end of c.$10bn-$16bn target range M&A + Other: -$1.9bn -$1.6bn acquisitions +$1.0bn disposals -$1.3bn FX revaluation movements, margin receipts on debt hedging instruments, other Maintain strong BBB/Baa End ND: $10.7bn 0.72x ND/Adj.EBITDA 108% FFO/ND Baa2/BBB Start ND: $15.5bn 1.51x ND/Adj.EBITDA 50% FFO/ND Baa3/BBB recommended distribution (based on 2017 equity cash flows) $1.0 bn fixed base distribution from Marketing $1.9 bn variable distribution, representing 36% of Industrial free cash flow, above the 25% policy minimum (1) M&A + Other 2017 Equity cash flows Higher distribution reflects strength in underlying 2017 cash flow, balance sheet position and 2018 outlook Variable component continuously reviewed in the context of overall balance sheet requirements, surplus capital position and prevailing conditions and outlook Opportunity to top up as appropriate at interim reporting Distribution payout of 52% of net income pre-significant items Distribution paid in 2017: -$1.0bn Recommended 2018 Distribution, basis 2017 cash flows: $2.9bn comprising: $1.0bn from Marketing $1.9bn from Industrial (36% Industrial FCF) (1) Distribution Equity Cash Flow: $7.7bn (1) $14.8bn adj. EBITDA less $1.4bn tax, $1.2bn net interest, $4.2bn capex, $0.2bn dividends to minorities, $0.1bn other Note: (1) See slide 26 for calculation

15 Volcan acquisition accounting treatment % of Class A (voting) shares acquired on 9 th November 2017 (1) Cash consideration of $734M in 2017 Total voting shares interest increased from 20.7% to 63% Glencore s economic interest (including Class B non-voting shares, excluding treasury) increased from 7.7% to 23.3% It is our current intention to internally report on / treat this investment in accordance with equity accounting principles, in parallel with full consolidation for IFRS reporting purposes Fair values are provisional, will be completed within 12 months of acquisition From the date of acquisition, the operation contributed $160 million of revenue and $Nil of attributable income Volcan s net debt as at 31 December 2017 was $704M (2) Fair value of Volcan net assets acquired (1) Non-current assets 4816 Property, plant and equipment 4656 Other 160 Current assets 397 Inventories 80 Accounts receivable 206 Cash and cash equivalents 81 Other 30 Non-controlling interest Non-current liabilities Borrowings -629 Deferred tax liabilities -986 Provisions -174 Current liabilities -598 Borrowings -175 Accounts payable -386 Other financial liabilities -37 Total fair value of net assets acquired 1093 Less: cash and equivalents acquired -81 Less: amounts previously recognized as other investments -359 Net cash used in acquisition of subsidiaries 653 Notes: (1) See note 24, page 95 of the. (2) See Alternative Performance Measures, page 121 of the.

16 Outlook Ivan Glasenberg Chief Executive Officer La Jagua coal, Prodeco, Colombia

17 Our commodity mix is compelling 16 Copper: looming supply challenges Demand: robust demand, critical to electric vehicle adoption Supply: underinvestment, grade declines & elevated strike risk Cobalt: enabling the electric vehicle story Demand: EV batteries, super alloys, consumer electronics Supply: geological scarcity, by-product of Cu, Ni Zinc: supply constraints Demand: increasing galvanising rates in EM Supply: underinvestment and environmental restrictions Lead: underpinned by supply challenges Demand: robust battery and energy storage dynamics Supply: underinvestment and environmental restrictions Nickel: crucial to electric vehicles Demand: EV batteries, critical alloys, austenitic stainless Supply: Declining sulphides, long lead time, scarce Class1 Ni Thermal Coal: Powering Asian growth & urbanisation Demand: key to EM industrialisation & growth Supply: underinvestment, declining energy content Glencore most exposed to mid/late cycle commodities (1) GLEN Peer 1 Peer 2 Peer 3 Peer 4 Early Cycle Mid Cycle Late Cycle Example commodities by cycle stage: Early: Iron Ore, Coking coal, Manganese Mid: Copper, Zinc, Nickel, Aluminium, Lead Late: Cobalt, Oil/Gas, PGMs, Diamonds, Thermal Coal, Agricultural products Notes: (1) Source UBS, commodities weighted by contribution to 2018F EBITDA as at 13 February 2018

18 Resilient and proven cash generative business model 17 Industrial: Tier 1 Assets in Tier 1 Commodities Genuinely diversified by geography and commodity Major producer of copper, cobalt, zinc, nickel and thermal coal These commodities combine persistent industry supply challenges with robust underlying demand Sustainably low-cost long-life assets in many of the world s premier mining districts Marketing: Proven high ROE business Unique, asset-supported, highly diversified earnings base Consistent earnings and high cash conversion Defensive but with upside in constructive market conditions Strongly cash generative at current prices 2018 illustrative Group FCF of c.$9.6bn from EBITDA of c.$19.7bn at spot/forward prices (2) Strong cash margins across our key Industrial assets (1) 77% Marketing earnings resilience (Indexed) Marketing Adjusted EBIT Indexed 120% 102% ex Au 67% Copper Zinc Nickel Coal 41% Industrial Adjusted EBITDA Indexed Note: (1) Cash margin is spot cash LME (for Copper, Zinc, Nickel) as at 16 February 2018, less 2018 unit cost as detailed in slide 10, expressed as a percentage of relevant commodity price. Cash margin for coal based on 2017 actual EBITDA mining margin of 41%. Disclosed cost is full cost including all cash costs to allow reconciliation and generation of EBITDA. (2) See slide 23 for calculations.

19 Our outlook 18 Compelling commodity mix Leading global producer of Tier 1 commodities: copper, cobalt, nickel, zinc & thermal coal Tier 1 commodity outlooks underpinned by persistent supply challenges and robust demand Best placed large cap company for energy and mobility transformation Cash generative & unique business model Diversified portfolio of Tier 1 Industrial Assets sustainably low-cost & long-life Marketing is highly cash generative across the cycle 2018 illustrative (1) FCF of c.$9.6bn from EBITDA of c.$19.7 bn at spot/forward prices Able and willing to grow our business We define growth as growth in cash flows Reactivate idled capacity as appropriate Low-cost brownfield options Bolt-on acquisitions focused on existing commodities/geographies Strong track record of investment Conservative financial policies Optimal Net debt (2) range of $10-16bn; Net debt /EBITDA < 2.0x through the cycle; commitment to strong BBB/Baa Investment Grade Distribution policy reflects business strengths: fixed $1bn base distribution from Marketing plus a minimum payout of 25% of Industrial FCF, based on prior year cash flows Prudent reinvestment and recycling of capital Note: (1) See slide 23 for calculation. (2) Net debt defined as gross debt less cash and cash equivalents and readily marketable inventories.

20 Q&A Copper anodes, Altonorte copper smelter, Chile

21 Appendix Antapaccay flotation circuit, Antapaccay Copper, Peru

22 production guidance 21 Copper: +330kt to 2020 Katanga: KML guidance: c.150kt 2018, c.300kt 2019 Mopani +90ktpa, phased ramp-up, late 2018 to 2020 Alumbrera closure in 2018 Cobalt: +36kt to 2020 Higher cobalt production at Katanga and Mutanda INO and Murrin Murrin production volumes stable Zinc/Lead: +210kt/+68kt to 2020 Reflects anticipated restart of Lady Loretta in H1 2018, higher Antamina grades and initial Zhairem production in 2020 Nickel: +33kt to 2020 Reflects ramp up of Koniambo Coal: +16Mt to 2020 Addition of HVO (c.7mtpy) and 47.5% of United OC (c.2mt in 2020) Normalisation following Australia/Colombia temporary strike and weather effects Oil: +2 Mbbl to 2020 Growth from Chad West drilling programme Includes existing producing fields in Chad West and EG only Commodity Guidance (1) 2018 Weighting FY 2017A FY 2018 FY 2019 FY 2020 H1 H2 Copper - Base production kt ± ± ± 30 Katanga KML (2) guidance kt Copper Group production kt ± ± ± 30 48% 52% Cobalt - Base production kt ± 3 31 ± 3 31 ± 3 Katanga KML (2) guidance kt Cobalt Group production kt ± 3 65 ± 3 63 ± 3 45% 55% Zinc kt ± ± ± 30 45% 55% Lead kt ± ± ± 10 42% 58% Nickel kt ± ± ± 5 45% 55% Ferrochrome kt ± ± ± 30 50% 50% Coal Mt ± ± ± 5 50% 50% Oil entitlement interest Mbbl ± ± ± % 50% key growth: Copper: +25%, Cobalt: +133%, Zinc: +19%, Lead: +25%, Nickel: +30%, Ferrochrome: +6%, Coal: +14%, Oil: +39% Note: (1) As per guidance on page 18 of the Production Report for the 12 months ended 31 December 2017, 1 February Coal guidance for 2019 and 2020 adjusted by 5Mt to reflect sale of Tahmoor and South Africa accounting change. (2) Katanga Mining Limited press release, 11 December 2017, Katanga Mining announces commissioning of the core of the first train of Whole Ore Leach plant and provides an operational update.

23 2017 Industrial mine costs/margin reconciliation 22 Copper (1) Guidance Actual Total Copper production (kt) Zinc (1) Guidance Actual Total Zinc production (kt) Nickel (1) Guidance Actual Total Nickel (kt) Coal (1) Guidance Actual Total Coal (Mt) Cu from Zn & Ni depts. (kt) Zn from Cu department (kt) Less Koniambo (kt) Actual production (Mt) Katanga/Mopani prodn (kt) Net relevant production (k/t) 1102 Act. Relevant production (k/t) 1119 Average 2017 Cu price (c/lb) Full cash cost (c/lb) FY Margin (c/lb) FY Margin ($/t) Less African Cu relevant losses while production curtailed - Guided at H ($M) % payability (kt) Net relevant production (kt) 831 Act. relevant production (kt) 808 Average 2017 Zn price (c/lb) Full cash cost (c/lb) 9 16 FY Margin (c/lb) FY Margin ($/t) Implied EBITDA ($M) Reported 2017 EBITDA ($M) 2620 Net relevant production (kt) 95.0 Act. relevant production (kt) 91.6 Average 2017 Ni price (c/lb) Full cash cost ($/t) FY Margin (c/lb) FY Margin ($/t) Implied EBITDA ($M) Inventory adjustment ($M) 65 Reported 2017 EBITDA ($M) 633 Average Cal17 NEWC ($/t) Portfolio mix adjustment ($/t) Full cash cost ($/t) FY Margin ($/t) Implied EBITDA ($M) Less coal economic hedging - Actual ($M) EBITDA ($M) Reported 2017 EBITDA ($M) Actual ($M) -354 Implied EBITDA ($M) Inventory Adjustment ($M) -55 Reported 2017 EBITDA ($M) 4360 Notes Notes Notes Notes 2017 copper full cash costs of 87c/lb was flat year-on-year. Improved 2017 zinc full cash cost of -16c/lb relative to Improved 2017 nickel full cash cost of 191c/lb relative to Portfolio mix adjustment increase from $6/t guidance to Modest FX and weather / volume related unit cost guidance of -9c/lb mainly reflects the benefit of higher lead, guidance of 213c/lb reflects the benefit of higher cobalt and $10/t actual reflects divergence of the various global pressures, offset by higher zinc and cobalt by-product copper and gold by-product credits copper by-product credits pricing/quality indices as well as lower HCC and semi-soft prices prices in H Note: (1) Guidance based on 2017 Half-year results presentation, 10 August 2017 and the Investor update presentation, 12 December 2017.

24 Illustrative spot annualised cashflows 23 Group $ billion Copper EBITDA 7.1 Copper (5) Guidance Total copper production (kt) 1465 Zinc (6) Guidance Total zinc production (kt) 1090 Nickel (7) Guidance Net production excl Koniambo (kt) 99 Zinc EBITDA 3.5 Nickel EBITDA 1.0 Coal EBITDA 5.0 Other Industrial EBITDA (1) 0.3 Marketing EBITDA (2) 2.9 Group EBITDA 19.7 Cash Taxes, Interest + other -5.2 Capex (3) -4.9 Illustrative spot free cash flow (4) 9.6 Cu from Zn & Ni departments. (kt) -147 Net relevant production (kt) 1318 Spot Cu price (c/lb) 324 Cost guidance at January 2018 prices (c/lb) -80 Margin ($/lb) 244 Margin ($/t) 5369 Spot annualised Adj. EBITDA ($M) 7077 Zn from Cu department (kt) % payability (kt) -145 Net relevant production (kt) 823 Spot Zn price (c/lb) 161 Cost guidance at January 2018 prices (c/lb) 31 Margin ($/lb) 192 Margin ($/t) 4243 Spot annualised Adj. EBITDA ($M) 3491 Spot Ni price (c/lb) 643 Cost guidance at January 2018 prices (c/lb) -180 Margin ($/lb) 463 Margin ($/t) Spot annualised Adj. EBITDA ($M) 1011 Coal (8) Guidance Total coal (Mt) 134 Average Cal18 NEWC price ($/t) 105 Portfolio mix adjustment at January 2018 prices ($/t) -16 Cost guidance at January 2018 prices (c/lb) -52 Margin ($/t) 37 Spot annualised Adj. EBITDA ($M) 4958 Notes: (1) Other industrial EBITDA includes Ferroalloys, Oil and Aluminium less c.$350m corporate SG&A. (2) Marketing Adjusted EBITDA calculated using the mid point of Marketing Adjusted EBIT guidance on Slide 21 + $200M of Marketing D+A. (3) Industrial capex including JV capex plus marketing capex of c.$135m in 2018E. (4) Excludes working capital changes and distributions. Notes: (5) Copper spot annualised adjusted EBITDA calculated basis mid-point of production guidance Slide 21 adjusted for copper produced by other departments. Spot cash LME price as at 16 February Costs include TC/RCs, freight, royalties and a credit for custom metallurgical EBITDA. Notes: (6) Zinc spot annualised adjusted EBITDA calculated basis mid-point of production guidance Slide 21 adjusted for zinc produced by other departments less adjustment for 85% payability. Spot cash LME price as at 16 February Cost includes credit for custom metallurgical EBITDA. (7) Nickel spot annualised adjusted EBITDA calculated basis mid-point of production guidance Slide 21. Spot cash LME price as at 16 February Notes: (8) Coal spot annualised adjusted EBITDA calculated basis mid-point of production guidance Slide 21. Estimated average 2018 NEWC forward price of $105/t less $16/t portfolio mix adjustment gives a $37/t margin to be applied across overall forecast group production of 134Mt. Higher cost/portfolio mix guidance vs 2017 (+$6/t & +6/t) reflects FX impact from stronger producer currencies, higher fuel prices, higher royalties as well as expected timing of HVO closing and lower HCC and SSCC pricing.

25 Long mine-lives and significant resource optionality in Tier 1 commodities 24 Long-life low-cost assets in many of the world s premier mining districts Supports sustainable long-term cash flows Significant mine-life extension potential embedded in all key commodities Copper: Antapaccay brownfield extension (Coroccohuayco), Collahuasi/Antamina expansion potential, Mutanda sulphides, Lomas Bayas sulphides, Mount Isa extension etc. Zinc: Kazzinc brownfield extensions, Contonga (Peru), brownfield optionality in newly acquired Volcan stake etc. Nickel: Raglan, Sudbury, KNS and Murrin Murrin long-life mining districts Thermal coal: extensive optionality and flexibility from existing operations; life extensions and brownfield developments 2017 Reserve life (1) : 20 years 2017 M+I Mineral Resource: 52Mt (2) Key long-life assets: African copper Collahuasi Antamina Antapaccay 2017 Reserve life (1) : 19 years 2017 M+I Mineral Resource: 57Mt (2) Key long-life assets: Mount Isa McArthur River Antamina Kazzinc Plus resource from the newly acquired Contonga asset and the Volcan stake 2017 Reserve life (1) : 18 years 2017 M+I Mineral Resource: 4.2Mt (2) Key long-life assets: Koniambo Murrin Murrin INO Approved extension projects in Canada significantly extend Raglan and Sudbury district mine lives 2017 Reserve life (1) : 14 years Copper Zinc Nickel Thermal Coal 2017 M+I Mineral Resource: 8 bt (2) Brownfield optionality across the portfolio Plus additional resources from the newly acquired HVO assets Notes: (1) Based on contained metal in 2017 proven and probable ore reserves, as reported in the 2017 Reserves and Resources Statement, and weighted by annual production that is based on 2017 actual or life of mine annual average production where more representative. Excludes operations that are closed/on care and maintenance as well as projects that are not currently approved. (2) Measured and Indicated Resource contained metal in 2017 calculated on corresponding tonnages and grades presented in the 2017 Resources and Reserves report and adjusted to reflect Glencore s attributable interest. Excludes operations that are closed/on care and maintenance as well as projects that are not currently approved.

26 Energy and mobility transformation represents significant new potential sources of commodity demand 25 Electric vehicles (EVs) have the potential to be a disruptive force underpinning demand for our commodities The rapid emergence of EVs reflects the near simultaneous alignment of key drivers: Environmental considerations Political mandates Technological progress Consumer experience We commissioned CRU (1) to model the metal requirements to enable the Electric Vehicles Initiative (2) target of 30% EV market share by 2030: c.4.1mtpa of copper (18% of 2017 supply) c.1.1mtpa of nickel (55% of 2017 supply) 314ktpa of Cobalt (332% of 2017 supply) Estimated average metal use per vehicle (1) Based on estimated 53kWh global average battery pack size Metal demand implications across the value chain (1) As early as 2020, forecast demand is becoming material, requiring an additional c.390kt of copper, c.85kt of nickel and 24kt of cobalt Generation and grid infrastructure Grid storage Charging infrastructure Non-ICE vehicles Cu Kt Ni Kt Co kt Sources: (1) CRU Mobility and Energy Futures Perspectives towards 2035, prepared for Glencore by CRU Consulting. (2) Specifically on transportation, the EVI is a multi-government policy forum comprising 16 major global economies. The initiative seeks to facilitate the global deployment of 20 million EVs by A further campaign announced in 2017, led by China, targets at least 30% new electric vehicle sales by 2030, collectively across all EVI countries..

27 2018 Recommended distribution calculation 26 Distribution policy: $1bn fixed payment from Marketing free cash flow Variable payment representing a minimum 25% of Industrial asset free cash flow Referenced to prior year earnings Paid in two equal installments in H1/H2 Variable component continuously reviewed in the context of overall balance sheet requirements, surplus capital position and subject to prevailing conditions and outlook Opportunity to top up distributions, as appropriate at interim reporting Basis 2017 equity cash flows, the Board has recommended a 2018 distribution $2.9bn, comprising $1bn from Marketing and 36% ($1.9bn) of Industrial asset cash flows Distribution payout of 52% of Net income pre significant items 2018 Recommended distribution Marketing Industrial Total (1) 2017 Adjusted EBITDA 3,224 11,538 14,762 Page 7 Non-cash items in associates' EBITDA (39) - (39) Page 122 Capex (incl. JVs) (214) (4,020) (4,234) Page 58 Tax paid (96) (825) (921) Page 37 Tax paid by certain associates and JVs (35) (416) (451) Page 122 Interest paid (216) (948) (1,163) Page 37 Interest paid by certain associates and JVs (36) - (36) Page 122 Dividends paid to minority interests - (194) (194) Page 38 Equity cash flow 2,588 5,135 7,724 Industrial distribution % of Industrial cash flows 36% Minimum distribution ($M) 1,000 1,284 2,284 $0.16 Additional distribution proposed ($M) $0.04 Total distribution ($M) 1,000 1,853 2,853 $0.20 Number of eligible shares (M) (2) 14,265 Distribution ($/share) $0.20 $/share Note: (1) Refer to, (2) See note 15 page 79. Eligible shares calculated from 14,586,200,000 ordinary shares as at 31 December less 321,309,000 trust and treasury shares that do not participate in the distribution.

28 Distribution timetable 27 H distribution timetable Jersey Johannesburg Applicable exchange rate determination date (Johannesburg Stock Exchange (JSE) 12 April Applicable exchange rate announced on the JSE 13 April Last day to effect removal of shares cum div between Jersey and JSE registers 13 April Last time to trade on JSE to be recorded in the register for distribution 23 April H1 Ex-Distribution Date: 26 April 24 April H1 Distribution record date, by close of business: 27 April 26 April Deadline currency election (Jersey): 15 May Deadline for return of currency elections form (Jersey shareholders) 30 April Removal of shares between the Jersey and JSE registers permissible from 30 April Applicable exchange rate reference date (Jersey) 2 May Annual General Meeting (shareholder vote to approve aggregate distribution) 2 May H1 Distribution payment date 23 May Planned H Distribution September 2018