Glencore PLC — Earnings Release 2013

Mar 4, 2014

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RNS Number : 4168B

Glencore Xstrata PLC

04 March 2014

NEWS RELEASE

Baar, 4 March 2014

Preliminary Results 2013

Key Highlights:

•       Adjusted pro forma EBITDA of $13.1bn consistent with 2012, reflecting:

-    Strong marketing results, with Adjusted EBITDA up 17% to $2.6 billion (Adjusted EBIT up 11% to $2.4 billion).

-    Industrial Adjusted EBITDA lower by a respectable 4% to $10.5 billion, as increased production and improved cost management, aided by some merger related synergies, substantially mitigated the impact of the weaker commodity price environment.

•       Strong year for production growth:

-    Copper up 26% to 1.5 million tonnes, including African copper, up 43%, with Mutanda and Katanga each reaching 200,000 tonnes p.a. capacity at year-end and 58% production growth at Collahuasi.

-    Ferrochrome up 32% to 1.2 million tonnes based on higher utilisation of the smelters and furnaces and the successful commissioning of the Tswelopele pelletizing plant.

-    Coal up 4% to 138.1 million tonnes, driven by expansions at Prodeco and in Australian thermal coal.

-    Start-up of production at the Alen (Equatorial Guinea) and Badila (Chad) oil fields.

•       Successful integration of Xstrata, with sustainable annual synergies of $2.4 billion identified and substantially delivered. The full benefit is expected to be realised in 2014, with implementation costs of some $0.3 billion, mostly incurred in 2013.

•       Net debt increased to $35.8 billion as the Group nears completion of many of its large development projects, including McArthur River, African copper and the pre-commissioning of Koniambo, the benefits of which should start to accrue in the near term. Capital expenditure is now on steeply declining trajectory.

•       Operating cash flow generation in the form of pro forma FFO was solid at $10.4 billion, slightly ahead of 2012.

•       Overall balance sheet remains strong and flexible with $13 billion of committed available liquidity at year-end.

•       Active balance sheet / portfolio management continued:

-    Las Bambas sale process ongoing.

-    Successful sale of the pasta and malt businesses during 2013, acquired as part of Viterra.

-    Repayment of $1.2 billion of Russneft loans received during the year.

•       Secondary listing on the JSE, deepening our relationship with South Africa and highlighting our confidence in Africa as an investment destination.

•       Statutory Day One goodwill impairment of $7.5 billion was recorded in relation to the Xstrata acquisition, reflecting the broader negative mining industry environment / sentiment which prevailed during 2013 and the heightened risks associated with greenfield and large scale expansion projects.

•       Board has recommended a final distribution of $11.1 cents per share, or $16.5 cents for the full year, some 4.8% higher than 2012, reflecting our continued confidence in the strength and prospects for the group.

Glencore's Chief Executive Officer, Ivan Glasenberg, commented:

"Our marketing division once again delivered a strong overall performance, while the modest year on year decline in our industrial asset performance inevitably reflected the weaker commodity price environment in 2013.

Glencore remains the only genuinely diversified natural resources company in respect of business activity, commodity and geography. Our financial performance in 2013 reflects this, with a consistent pro forma EBITDA and operational cash flow performance compared to 2012.

As we look ahead to 2014, we continue to see healthy demand growth in all our key commodities, underpinned by the long term trend of urbanisation in emerging markets and parts of the developed world returning to trend growth."

In addition, Glencore has today published on its website (www.glencorexstrata.com) a presentation which contains a summary of the 2013 preliminary results.

US$ million	2013	20122	Change %
Key statement of income and cash flows highlights - pro forma1:
Revenue	239,673	236,236	1
Adjusted EBITDA3	13,071	13,086	-
Adjusted EBIT3	7,434	8,591	(13)
Net income attributable to equity holders pre-significant items4	4,583	5,970	(23)
Earnings per share (pre-significant items) (US$)	0.35	0.45	(22)
Funds from operations (FFO)5	10,375	10,267	1
Purchase and sale of property, plant and equipment	12,865	12,994	(1)

US$ million	2013	2012	Change %
Key statement of income and cash flows highlights - reported:
Revenue	232,694	214,436	9
Adjusted EBITDA3	10,466	5,943	76
Adjusted EBIT3	5,970	4,470	34
Net income attributable to equity holders pre-significant items4	3,666	3,064	20
Net (loss)/income attributable to equity holders	(7,402)	1,004	n.m.
Earnings per share (pre-significant items) (US$)	0.33	0.44	(25)
Funds from operations (FFO)6	8,030	4,115	95
Purchase and sale of property, plant and equipment	9,849	3,005	228

US$ million	2013	2012	Change %
Key financial position highlights:
Total assets - reported	154,932	105,5642	47
Current capital employed (CCE)3 - reported	24,351	23,9242	2
Net debt5 - pro forma	35,810	29,4602	22
Ratios:
FFO to Net debt5 - pro forma	29.0%	34.9%2	(17)
Net debt to Adjusted EBITDA - pro forma	2.74x	2.25x2	22
Adjusted EBITDA to net interest - pro forma	9.12x	11.72x2	(22)
Adjusted EBITDA to net interest - reported	7.54x	6.13x	23
Adjusted current ratio - reported	1.18x	1.16x	2

1  Refer to page 4.

2 Pro forma 2012 has been adjusted to reflect the updated year-end fair value acquisition accounting for the acquisitions of Xstrata and Viterra.

3  Refer to glossary on page 125 for definitions and for Adjusted EBIT/EBITDA to note 2 of the financial statements.

4  Refer to page 121 for pro forma results and page 7 for reported results.

5  Refer to page 123.

6  Refer to page 9.

To view the full statement please click here

http://www.rns-pdf.londonstockexchange.com/rns/4168B_1-2014-3-3.pdf 

For further information please contact:

### Investors	### Media
Paul Smith t: +41 (0)41 709 24 87 m: +41 (0)79 947 13 48 e: paul.smith@glencore.com	Charles Watenphul t: +41 (0)41 709 24 62 m: +41 (0)79 904 33 20 e: charles.watenphul@glencore.com
### Investors	### Investors	### Finsbury (Media)
Martin Fewings t: +41 (0)41 709 28 80 m: +41 (0)79 737 56 42 e: martin.fewings@glencore.com	Elisa Morniroli t: +41 (0)41 709 28 18 m: +41 (0)79 833 05 08 e: elisa.morniroli@glencore.com	Guy Lamming Dorothy Burwell t: +44 (0)20 7251 3801

www.glencorexstrata.com

This information is provided by RNS

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