REG - Glencore PLC - Preliminary Results 2024

GlencoreAnnouncement

19/02/2025 07:00

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RNS Number : 5914X  Glencore PLC  19 February 2025

NEWS RELEASE

Baar, 19 February 2025

Preliminary Results 2024

Highlights

Glencore's Chief Executive Officer, Gary Nagle, commented:

"Operationally, 2024 was a strong year for Glencore. Our Industrial assets
delivered full year production numbers within their original guidance ranges,
which together with the addition of EVR's steelmaking coal volumes from July
2024, resulted in a c.4% growth in copper equivalent volumes year over year.
Basis current production plans for our existing operations, we also model a
c.4% compound annual growth rate to 2028 (in copper equivalents) from 2024.

"Our strong operational performance, along with another strong Marketing
contribution, supported the generation of Adjusted EBITDA of $14.4 billion and
Funds from operations of $10.5 billion during 2024, down 16%, but up 11%,
respectively compared to 2023. The decline in Adjusted EBITDA, particularly
within the Industrial segment, was mainly a function of lower average energy
coal prices year over year.

"Aided by the healthy cash generation, along with $1.8 billion of net working
capital inflows, we were able to fund $6.7 billion of net capex, the $7
billion acquisition of EVR and $1.9 billion of shareholder returns, all while
limiting the increase in year-end Net debt to $11.2 billion, vs $4.9 billion
in 2023. Furthermore, the 2024 figure includes $1.2 billion of marketing lease
liabilities and $0.6 billion of IFRS consolidated EVR liabilities, neither of
which consume capital headroom for consideration of 'top-up' shareholder
returns. And finally, with a Net debt to Adjusted EBITDA ratio of 0.78x, we
continue to have significant financial headroom and strength.

"We are pleased to announce c.$2.2 billion (c.$0.182 per share) of shareholder
returns in accordance with our capital allocation framework. We are
recommending a $0.10 per share (c.$1.2 billion) base cash distribution,
together with a 'top-up' buyback of $1.0 billion (c.$0.082 per share). The top
up returns will be affected by way of a buyback to be concluded before the
release of our H1 2025 results on 6 August, the date on which we plan to
announce further shareholder returns, noting our regular updating and
reporting of illustrative free cashflow generation at spot commodity prices,
which is currently a healthy c.$4.8 billion.

"The strength of our diversified business model across our industrial and
marketing businesses, which focus on the commodities needed for today and
tomorrow, has proved itself adept in a range of market conditions, giving us a
solid foundation to navigate successfully the near-term macroeconomic
environment and be well positioned for the future."

 

 US$ million                                                    2024                2023                 Change %
 Key statement of income and cash flows highlights(1):
 Revenue                                                             230,944             217,829                    6
 Adjusted EBITDA(◊)                                                   14,358              17,102                (16)
 Adjusted EBIT(◊)                                                      6,938              10,392                  (33)
 Net (loss)/income for the year attributable to equity holders        (1,634)              4,280                 (138)
 (Loss)/earnings per share (Basic) (US$)                               (0.13)               0.34                 (138)
 Funds from operations (FFO)(◊)                                       10,529               9,452                   11
 Distributions to equity holders and purchase of own shares            1,894              10,130                  (81)

 

 US$ million                         31.12.2024           31.12.2023           Change %
 Key financial position highlights:
 Total assets                             130,460              123,869                    5
 Total equity                              35,660               38,237                   (7)
 Net funding(2◊)                           36,405               31,062                   17
 Net debt(2◊)                              11,167                4,917                  127

 Ratios:
 Net debt to Adjusted EBITDA(◊)              0.78                 0.29                  169

1 Refer to basis of presentation on page 7.

2 Includes $1,072 million (2023: $705 million) of Marketing lease liabilities.

◊ Adjusted measures referred to as Alternative performance measures (APMs)
which are not defined or specified under the requirements of International
Financial Reporting Standards; refer to APMs section on page 115 for
definitions and reconciliations and to note 2 of the financial statements for
reconciliation of Adjusted EBIT/EBITDA.

 

2024 financial scorecard

-       $14.4 billion Adjusted EBITDA, down 16%, primarily reflecting
weaker energy coal prices

-       Marketing Adjusted EBIT of $3.2 billion, at the top end of our
long-term $2.2-$3.2 billon guidance range, albeit 8% lower than 2023. A strong
performance from Metals and Minerals was more than offset by the progressive
normalisation of energy markets from the severe disruption and extreme
volatilities seen in 2022/23

-       Industrial Adjusted EBITDA of $10.6 billion, down 20%, primarily
driven by lower energy coal prices, partially offset by the addition of EVR's
steelmaking coal business and higher y/y earnings in our zinc business,
primarily via its exposure to higher gold prices

-       Funds from operations (FFO) of $10.5 billion, up 11%

-       Net cash purchase and sale of PP&E: $6.7 billion compared to
$5.6 billion in 2023; EVR accounts for majority of the increase

-       Net income attributable to equity holders pre-significant items:
$3.7 billion; Net loss attributable to equity holders: $1.6 billion

-       Adjusted EBITDA mining margins were 28% in our metals
operations, 45% in steelmaking coal and 32% in energy coal

balance sheet

-       Aided by healthy FFO and $1.8 billion of working capital
inflows, we funded $6.7 billion of net capex, the $7 billion EVR acquisition
and $1.9 billion of shareholder returns, while limiting the increase in
year-end Net debt to $11.2 billion (from $4.9 billion)

-       Net funding, including marketing lease liabilities of $1.1
billion and IFRS consolidated EVR debt, increased to $36.4 billion

-       Available committed liquidity of $11.5 billion; bond maturities
maintained around a cap of c.$3 billion in any given year

-       Net debt/Adjusted EBITDA of 0.78x provides significant financial
headroom and strength

-       In June 2023, Glencore agreed to dispose of its interest in
Viterra in a cash and shares transaction with Bunge. For its c.50% stake,
Glencore will receive $1.0 billion in cash and 32.8 million Bunge shares
(c.15%) in the combined group. The merger, which remains subject to regulatory
approvals, is expected to close in the coming months

-       Spot illustrative annualised free cash flow generation of c.$4.8
billion from Adjusted EBITDA of c.$15.3 billion

 

To view the full report please click here:
https://www.glencore.com/.rest/api/v1/documents/static/218c5d8d-cc96-47f9-8df3-f21116de5ea9/GLEN-2024-Preliminary-Results.pdf
(https://www.glencore.com/.rest/api/v1/documents/static/218c5d8d-cc96-47f9-8df3-f21116de5ea9/GLEN-2024-Preliminary-Results.pdf)

To view the 2024 Preliminary Results Presentation please click here:
https://www.glencore.com/.rest/api/v1/documents/static/12da8f07-23d7-4150-91b8-cb8fc651cbca/20250219-GLEN-2024-Preliminary-Results-Presentation.pdf
(https://www.glencore.com/.rest/api/v1/documents/static/12da8f07-23d7-4150-91b8-cb8fc651cbca/20250219-GLEN-2024-Preliminary-Results-Presentation.pdf)

 

For further information please contact:

 Investors
 Martin Fewings        t: +41 41 709 2880      m: +41 79 737 5642      martin.fewings@glencore.com (mailto:martin.fewings@glencore.com)
 Media
 Charles Watenphul     t: +41 41 709 2462      m: +41 79 904 3320      charles.watenphul@glencore.com

www.glencore.com (http://www.glencore.com)

Glencore LEI: 2138002658CPO9NBH955

Please refer to the end of this document for important information including
on forward-looking statements.

This announcement contains inside information.

 

Notes for Editors

Glencore is one of the world's largest global diversified natural resource
companies and a major producer and marketer of more than 60 commodities that
advance everyday life. Through a network of assets, customers and suppliers
that spans the globe, we produce, process, recycle, source, market and
distribute the commodities that support decarbonisation while meeting the
energy needs of today.

With around 150,000 employees and contractors and a strong footprint in over
30 countries in both established and emerging regions for natural resources,
our marketing and industrial activities are supported by a global network of
more than 50 offices.

Glencore's customers are industrial consumers, such as those in the
automotive, steel, power generation, battery manufacturing and oil sectors. We
also provide financing, logistics and other services to producers and
consumers of commodities.

Glencore is proud to be a member of the Voluntary Principles on Security and
Human Rights and the International Council on Mining and Metals. We are an
active participant in the Extractive Industries Transparency Initiative.

We will support the global effort to achieve the goals of the Paris Agreement
through our efforts to decarbonise our own operational footprint. For more
information see our 2024-2026 Climate Action Transition Plan available on our
website at glencore.com/publications.

 

Important notice

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. This document does not purport to contain all of the
information you may wish to consider.

Cautionary statement regarding forward-looking information

Certain descriptions in this document are oriented towards future events and
therefore contains statements that are, or may be deemed to be,
"forward-looking statements" which are prospective in nature. Such statements
may include, without limitation,  statements in respect of trends in
commodity prices and currency exchange rates; demand for commodities; reserves
and resources and production forecasts; expectations, plans, strategies and
objectives of management; expectations regarding financial performance,
results of operations and cash flows, climate scenarios; sustainability
(including, without limitation, environmental, social and governance)
performance-related goals, ambitions, targets, intentions and aspirations;
approval of certain projects and consummation and impacts of certain
transactions (including, without limitation, acquisitions and disposals);
closures or divestments of certain assets, operations or facilities
(including, without limitation, associated costs); capital costs and
scheduling; operating costs and supply of materials and skilled employees;
financings; anticipated productive lives of projects, mines and facilities;
provisions and contingent liabilities; and tax, legal and regulatory
developments.

These forward-looking statements may be identified by the use of
forward-looking terminology, or the negative thereof including, without
limitation, "outlook", "guidance", "trend", "plans", "expects", "continues",
"assumes", "is subject to", "budget", "scheduled", "estimates", "aims",
"forecasts", "risks", "intends", "positioned", "predicts", "projects",
"anticipates", "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. The information in this document provides an insight into how
we currently intend to direct the management of our businesses and assets and
to deploy our capital to help us implement our strategy. The matters disclosed
in this document are a 'point in time' disclosure only. 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 conditions and discussions of strategy, and reflect
judgments, assumptions, estimates and other information available as at the
date of this document or the date of the corresponding planning or scenario
analysis process.

By their nature, forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause actual results, performance or
achievements to differ materially from any future events, results,
performance, achievements or other outcomes expressed or implied by such
forward-looking statements. Important factors that could impact these
uncertainties include,without limitation, those disclosed in the risk
management section of our latest Annual Report and/or Half-Year Report, which
can each be found on our website. These risks and uncertainties may materially
affect the timing and feasibility of particular developments. Other factors
which may impact risks and uncertainties include, without limitation: the
ability to produce and transport products profitably; demand for our products
and commodity prices; development, efficacy and adoption of new or competing
technologies; changing or divergent preferences and expectations of our
stakeholders; events giving rise to adverse reputational impacts; changes to
the assumptions regarding the recoverable value of our tangible and intangible
assets; inadequate estimates of resources and reserves; changes in
environmental scenarios and related regulations, including, without
limitation, transition risks and the evolution and development of the global
transition to a low carbon economy; recovery rates and other operational
capabilities; timing, quantum and nature of certain acquisitions and
divestments; delays, overruns or other unexpected developments in connection
with significant projects; the ability to successfully manage the planning and
execution of closure, reclamation and rehabilitation of industrial sites;
health, safety, environmental or social performance incidents; labor shortages
or workforce disruptions; natural catastrophes or adverse geological
conditions, including, without limitation, the physical risks associated with
climate change; effects of global pandemics and outbreaks of infectious
disease; the outcome of litigation or enforcement or regulatory proceedings;
the effect of foreign currency exchange rates on market prices and operating
costs; actions by governmental authorities, such as changes in taxation or
laws or regulations or changes in the decarbonisation policies and plans of
other countries; breaches of Glencore's policy framework, applicable laws or
regulations; the availability of sufficient credit and management of liquidity
and counterparty risks; changes in economic and financial market conditions
generally or in various countries or regions; political or geopolitical
uncertainty; and wars, political or civil unrest, acts of terrorism, cyber
attacks or sabotage.

Readers, including, without limitation, investors and prospective investors,
should review and consider these risks and uncertainties (as well as the other
risks identified in this document) when considering the information contained
in this document. Readers should also note that the high degree of uncertainty
around the nature, timing and magnitude of climate-related risks, and the
uncertainty as to how the energy transition will evolve, makes it particularly
difficult to determine all potential risks and opportunities and disclose
these and any potential impacts with precision. Neither Glencore nor any of
its affiliates, associates, employees, directors, officers or advisers,
provides any representation, warranty, assurance or guarantee as to the
accuracy, completeness or correctness, likelihood of achievement or
reasonableness of any forward-looking information contained in this document
or that the events, results, performance, achievements or other outcomes
expressed or implied in any forward-looking statements in this document will
actually occur. Glencore cautions readers against reliance on any
forward-looking statements contained in this document, particularly in light
of the long-term time horizon which this document discusses in certain
instances and the inherent uncertainty in possible policy, market and
technological developments in the future.

No statement in this document is intended as any kind of forecast (including,
without limitation, a profit forecast or a profit estimate), guarantee or
prediction of future events or performance and past performance cannot be
relied on as a guide to future performance.

Except as required by applicable rules or laws or regulations, 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.

Sources

Certain statistical and other information included in this document is sourced
from publicly available third-party sources. This information has not been
independently verified and presents the view of those third parties, and may
not necessarily correspond to the views held by Glencore and Glencore
expressly disclaims any responsibility for, or liability in respect of, and
makes no representation or guarantee in relation to, such information
(including, without limitation, as to its accuracy, completeness or whether it
is current). Glencore cautions readers against reliance on any of the
industry, market or other third-party data or information contained in this
document.

Information preparation

In preparing this document, Glencore has made certain estimates and
assumptions that may affect the information presented. Certain information is
derived from management accounts, is unaudited and based on information
Glencore has available to it at the time. Figures throughout this document are
subject to rounding adjustments. The information presented is subject to
change at any time without notice and we do not intend to update this
information except as required.

This document contains alternative performance measures which reflect how
Glencore's management assesses the performance of the Group, including results
that exclude certain items included in our reported results. These alternative
performance measures should be considered in addition to, and not as a
substitute for, or as superior to, measures of financial performance or
position reported in accordance with IFRS. Such measures may not be uniformly
defined by all companies, including those in Glencore's industry. Accordingly,
the alternative performance measures presented may not be comparable with
similarly titled measures disclosed by other companies. Further information
can be found in our reporting suite available at glencore.com/publications.

Subject to any terms implied by law which cannot be excluded, Glencore accepts
no responsibility for any loss, damage, cost or expense (whether direct or
indirect) incurred by any person as a result of any error, omission or
misrepresentation in information in this document.

 

Other information
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.

 

 

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