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Rio Tinto Plc Agm 2008 Presentation Slides

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Rio Tinto Plc Agm 2008 Presentation Slides

  1. 1. Annual General Meeting 17 April 2008
  2. 2. Paul Skinner Chairman
  3. 3. New directors Yves Fortier October 2007 Paul Tellier October 2007 Dick Evans October 2007 3
  4. 4. 2007 – records across the board • Record underlying earnings of US$7.4 billion, up 1% • Record cash flow from operations of US$12.6 billion, up 15% • Record capital investment of US$5.0 billion, up 25% • Record new capital commitments US$8 billion announced • Dividend increased by 31% for the 2007 year – commitment to further 20%+ increases in 2008 and in 2009 4
  5. 5. Progressive dividend policy USc per share 96 97 98 99 00 01 02 03 04 05 06 07 08 09 5
  6. 6. Strategic fit of Alcan deal • Strategy focus on large, long life, competitive assets • High quality aluminium assets acquired • Aluminium sector leader, alongside iron ore and copper • Disposal of non-core assets ongoing 6
  7. 7. BHP Billiton offer rejected on value grounds • Unsolicited “pre-conditional” offer • Rejected on value grounds after full consideration • Fails to recognise Rio Tinto’s outstanding prospects • Rio Tinto performing strongly under talented management • Chinalco investment of 12% in Rio Tinto plc • Remain committed to existing strategy 7
  8. 8. Strong in Australia • Contribution to national wealth over many years • Base of significant operations • Invested about A$30 billion since 1998 • Value added of A$10 billion in 2007 • 17,000 employees in Australia • Leader in Aboriginal employment 8
  9. 9. Sustainable development • Key component of Rio Tinto values • Alcan shares this commitment • Smelting technology to reduce energy use/emissions • Clean hydro power a competitive advantage 9
  10. 10. Positive market outlook • Strong Chinese and Indian growth • Demand less affected by West • Multi-decade strong demand trend • Differentiated from financial markets • Rio Tinto portfolio well positioned 10
  11. 11. Conclusion • 2007 a transformational year • A new earnings/value creation trajectory • Strong management team performing well • Committed employees delivering success 11
  12. 12. Tom Albanese Chief executive
  13. 13. Safety is core to our business Decline in injury frequency rates 1998 - 2007 5 • 80% improvement in AIFR • 78% improvement in LTIFR Per 200 000 hours worked 4 3 All Injury Frequency Rate 2 1 Lost Time Injury Frequency Rate 0 98 99 00 01 02 03 04 05 06 07 13
  14. 14. Major investments, including Alcan • US$46 billion in growth projects – Alcan acquisition US$38 billion • Global leader with premier assets • Leader in aluminium technology • Sustainable hydro energy • Strong development portfolio • Synergies could yield US$1.1 billion 14
  15. 15. China continues to fuel commodity markets • High expectations fuelled by sustained demand • Fundamental shift in world economy • Conditions will continue for some time • Need to invest in market leaders 15
  16. 16. Another record year • Record production in – iron ore, bauxite, – alumina, aluminium, – refined copper and gold • Higher prices increased earnings by US$1.4 billion • Projects on time, within budget 16
  17. 17. Product group results EARNINGS • Copper - highest earner on strong sales and prices US$3.5 billion • Iron ore – earnings rose 18% for record year US$2.6 billion • Aluminium - earnings up 47% on record output US$1.0 billion • Energy – resurgent uranium the headline earner US$484 million • Diamonds and Minerals – Diavik set records US$488 million 17
  18. 18. Portfolio and capital management • Alcan acquisition transforming Rio Tinto • Focusing the portfolio – iron ore, copper, aluminium • Divestments reducing debt levels • US$2.5 billion of disposals already complete 18
  19. 19. Project pipeline driving growth Pebble Diavik u/g KUC Keystone Eagle Serbian borates Oyu Tolgoi Resolution Bunder diamonds Simandou Sulawesi nickel La Granja Madagascar ilmenite Pilbara/Hope Downs Canning zircon Argyle u/g Potasio Rio Colorado Chapudi coking coal Palabora magnetite 19
  20. 20. Rio Tinto – a leader in exploration Regina potash IOC orbit BC coking coal Serbian borates Mongolian coking coal Lakeview nickel Bingham orbit Bunder diamonds Colombian coking coal Simandou orbit La Granja orbit Colombia and Brazil ERA orbit Mozambique ilmenite Gove orbit Canning zircon Iron Ore Canning potash Copper/Gold Pilbara orbit Bauxite Energy Gippsland zircon Diamonds and Minerals 20
  21. 21. Strong forecast growth in total production Production volume index 200 190 8.6% Compound Annual Growth Rate 180 170 160 150 140 130 120 110 100 08 2008 09 2009 10 2010 11 2011 12 2012 13 2013 14 2014 15 2015 Notes: Production is total attributable production. Figures are based on estimated yearly production levels multiplied by long term analyst consensus prices. Total production volume is rebased to 100 for 2008. Commodities included for Rio Tinto: Aluminium, alumina, iron ore, export thermal coal, export metallurgical coal, copper, gold, silver, molybdenum, and uranium. Rio Tinto production source: Rio Tinto. 21
  22. 22. Delivering today, strongly positioned for growth in the future • FASTER at meeting the world’s growing demand • BETTER at leading and shaping our industry • SMARTER at creating shareholder value 22
  23. 23. Annual General Meeting 2008 17 April 2008 23

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