NGLOY - Anglo American plc (AAUKF) Q4 2023 Earnings Call Transcript

2024-02-22 17:41:11 ET

Anglo American plc (AAUKF)

Q4 2023 Earnings Conference Call

February 22, 2024, 09:30 AM ET

Company Participants

Stuart Chambers - Chairman

Duncan Wanblad - CEO

John Heasley - Finance Director

Al Cook - CEO of De Beers

Conference Call Participants

Jason Fairclough - Bank of America Merrill Lynch

Izak Rossouw - Barclays

Liam Fitzpatrick - Deutsche Bank

Alain Gabriel - Morgan Stanley

Christopher LaFemina - Jefferies

Richard Hatch - Berenberg

Julio Mondragon - BMO Capital Markets

Presentation

Stuart Chambers

Good morning, everyone. I'm Stuart Chambers, Chair of Anglo American. And it's my pleasure, as usual, to welcome you all, to our Results Presentation for 2023. Now, before handing over to Duncan and John, I'd just like to do two things I'd like to update you on last year's Board changes. And then also give you a very short board perspective on today and tomorrow.

Firstly, on Board changes, delighted that Magali Anderson joined us in April last year, a Senior Industrialist in the world of cement, but actually much more importantly, for us, at any rate, a passionate expert in sustainability. And as you all know, sustainability is at the heart of all we do, and actually how we do it at Anglo American. And then in December, but it's very well known to you is Stephen Pearce stepped down and retired in December, as after seven years as our Finance Director, and we welcomed John Heasley, who we see here, who joined on the first of December, a little more than a couple of months ago, I must say, John, it feels like it's a lot longer than that. But I'm very pleased to say, at risk of embarrassing John that he's already made, and he's already having a big impact.

So moving now to a brief perspective, on today, and on the future. And I'd like to start with a short few words on our long term future at Anglo American, we are in a very, very strong position indeed, we have extraordinary set of resources in copper, and high quality iron ore, and now in polyhalite. And collectively, these are all supported by three global mega-trends.

We've got multiple decades of resource in all three of these. And in several cases, we actually have endowments potentially exceeding a century of mine life. So great potential for organic, long term sustainable growth. However, to exploit these assets, and to invest in them, we need the right balance sheet. And we need sustainable financial performance.

So what do we mean by that? Well, last year's financial performance was poor. Now, sure, we have some very serious headwinds very seriously in PGM prices, but also in Diamond both prices and volumes. But Duncan and his team, of course, have not been and are not sitting around, waiting around and hoping for those cycles to bounce back. We have to instead be pulling every lever available to significantly improve our cash conversion, which, as you'll have seen last year, was at an unsustainable level.

So what are those levers? Well, I'll mention a few reestablishing operational excellence as a way of life for us, continuing the significant cost reduction started last year and continuing through into operations this year. And you'll have seen, I'm sure, the announcements from South Africa, for example, in PGMs and in iron ore, they're examples of important cost reductions. And I'm sure you will appreciate that those announcements follow a significant amount, a number of months of both planning and engagement, these are not knee jerk reactions to a second half set of results.

So Duncan is also very clear about the need to simplify our portfolio. In order to be able to allocate any extra cash we have to the most deserving long term growth prospects that we have. And of course, finally, he has already communicated that we will pursue the syndication of Woodsmith, in order for that to be a more manageable and major life project, just as we did with Quellaveco.

So Duncan, and John will now talk about this, and war as well as presenting the numbers. But the reason I was keen to make this short introduction was to leave you in no doubt about the fact that the Board is fully behind all these short and medium term imperatives, which are required. So that will, we will be able to secure a strong long term future, which we all know is achievable at Anglo American.

So thank you very much. I will now hand over Duncan, over to you.

Duncan Wanblad

Thank you, Stuart. And good morning to you all. Welcome, as always, and thanks a lot for joining us today. There's quite a lot that we'd like to cover this morning. And I'd like to also highlight that there's a more extensive amount of detail in the appendix this time around and obviously encourage you to work through that as well in your own time. ...

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