Wrap Text
GLN - Preliminary Results 2022
GLENCORE PLC
(Incorporated in Jersey under the Companies (Jersey) Law 1991)
(Registration number 107710)
JSE Share Code: GLN
LSE Share Code: GLEN
ISIN: JE00B4T3BW64
LEI: 2138002658CPO9NBH955
NEWS RELEASE
Baar, 15 February 2023
Preliminary Results 2022
Highlights
Glencore’s Chief Executive Officer, Gary Nagle, commented:
“The global pandemic, recovery from it and years of underinvestment, followed by conflict in
Europe, exposed pre-existing vulnerabilities in energy security and supply chains, underpinning
the generally high and volatile 2022 commodity price environment, which enabled the Group
to generate record profitability for the year.
”The unprecedented developments in global energy markets were material drivers for both our
marketing and industrial businesses, lifting Group Adjusted EBITDA to $34.1 billion, up $12.8
billion over the period. Marketing posted another record performance, with Adjusted EBIT of
$6.4 billion, up 73% year on year, driven primarily by our energy departments successfully
navigating the extreme market imbalances, volatility and dislocations across crude oil, LNG,
refined products, coal and logistics infrastructure. Industrial EBITDA increased by $10.2 billion
to $27.3 billion, benefitting primarily from record prices for our key coal benchmarks, amplified
by the incremental contribution from the two-thirds of Cerrejón, acquired in January 2022, that
Glencore did not previously own.
“Aligned with the record Adjusted EBITDA results, particularly in marketing, our net working
capital significantly increased during the period, reflecting materially higher energy prices and
elevated commodity market volatilities, where such additional investment in working capital
should be considered in the context of the $3.8 billion increase in Energy Marketing Adjusted
EBIT to $5.2 billion. Accounting for this build, significant surplus cash generation reduced Net
debt to $0.1 billion, allowing for today’s announcement of $7.1 billion (c.$0.56/share) of
shareholder returns, comprising a $5.1 billion base cash distribution ($0.40/share), an additional
$0.5 billion “top-up” cash distribution ($0.04/share) and a new $1.5 billion buy back programme
(c.$0.12/share).
“High inflation rates and associated tighter monetary conditions present some risk to the
economic outlook in 2023. China’s reopening, however, together with a continued global focus
on energy security and decarbonisation / electrification, mean that demand for many of our
commodities is likely to remain healthy, while supply constraints persist and inventories remain
relatively low.
“Recent government policies, such as the US Inflation Reduction Act and the EU’s proposed
Green Deal Industrial Plan, demonstrate the growing need for critical raw materials through
to the end of the decade and beyond, necessitating fresh investment in both primary supply
and recycling.
“The strength of our diversified business model across industrial and marketing, focusing on
metals and energy, has proved itself adept in a range of market conditions, giving us a solid
foundation to successfully navigate shorter-term challenges that may arise, as well as meet
the resource needs of the future. I would like to thank all our employees for their efforts and
tremendous contribution during the challenging, but very successful, 2022. As always, we
remain focused on operating responsibly and ethically and creating sustainable long-term
value for all our stakeholders.”
US$ million 2022 2021 Change %
Key statement of income and cash flows highlights(1):
Revenue 255,984 203,751 26
Adjusted EBITDA# 34,060 21,323 60
Adjusted EBIT# 26,657 14,495 84
Net income for the year attributable to equity holders 17,320 4,974 248
Earnings per share (Basic) (US$) 1.33 0.38 250
Funds from operations (FFO)# 28,938 17,057 70
US$ million 31.12.2022 31.12.2021 Change %
Key financial position highlights:
Total assets 132,583 127,510 4
Total equity 45,219 36,917 22
Net funding# 27,500 30,837 (11)
Net debt# 75 6,042 (99)
Ratios:
Net debt to Adjusted EBITDA# 0.00 0.28 (99)
(1) Refer to basis of presentation on page 6.
# 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 116 for definitions and reconciliations and
to note 2 of the financial statements for reconciliation of Adjusted EBIT/EBITDA.
STRONG FINANCIAL PERFORMANCE
– $34.1 billion Adjusted EBITDA, up 60% year-on-year (y/y), underpinned by robust Marketing
and Industrial results
– Net income, pre-significant items: $18.9 billion, up 107%
– Post significant items, Net income attributable to equity holders was $17.3 billion, up 248%.
Significant items reflect various impairments recorded and a gain on the acquisition of
Cerrejón
– Net cash purchase and sale of PP&E: $4.5 billion, up 19%
– Shareholder returns of $7.1 billion (c.$0.56/share) announced, comprising a proposed
$0.40/share ($5.1 billion) base distribution in respect of 2022 cash flows, alongside an
additional ‘top-up’ $0.5 billion ($0.04/share) cash distribution and a new $1.5 billion
(c$0.12/share) share buyback programme
RECORD INDUSTRIAL ASSET ADJUSTED EBITDA CONTRIBUTION
– Industrial Assets Adjusted EBITDA $27.3 billion, up 59%, primarily reflecting a $13.0 billion
increase from energy products, in line with significantly higher coal prices, as well as the
Cerrejon partner buy-out contribution
– Metals $9.3 billion, down $2.7 billion, reflecting higher costs and lower volumes; Energy
$18.6 billion, up $13.0 billion (+232%)
– Unit cost results: Cu 80¢/lb (+13¢/lb y/y); Zn 38¢/lb (+42¢/lb y/y, whereby 2022 is net of 23¢/lb
of non-cash inventory adjustments); Ni 631¢/lb (+177¢/lb y/y); coal $79/t ($166/t margin)
RECORD MARKETING RESULTS
– Marketing Adjusted EBIT $6.4 billion, up 73% y/y
– Energy Adjusted EBIT: $5.2 billion (+273%), as already tight post-pandemic energy markets
were jolted by significant dislocation, generating extreme volatility in oil, refining margins,
freight, gas and coal, with prices (absolute and in relation to quality and location
differentials) reaching multi-year highs or records in many cases
– Metals Adjusted EBIT: $1.6 billion (-34%), mainly reflecting challenging conditions arising
from China’s prolonged Covid-19 lockdowns as well as higher overall inflation, triggering
tighter monetary conditions and demand uncertainty
– Glencore’s equity accounted share of Viterra rose 4% to $494 million
STRONG BALANCE SHEET
– Net debt being managed around a $10 billion cap, with sustainable deleveraging (after
base distribution) below such cap periodically returned to shareholders via top-up cash
distributions / buybacks, as appropriate.
– Year-end Net debt of $0.1 billion allows for $2.0 billion of additional shareholder returns
under our “top-up” framework, taking into account the base distribution of $5.1 billion and
$2.9 billion of pro-forma debt-like other cash commitments at year-end
– Net debt to Adjusted EBITDA of 0.00x
– Available committed liquidity of $13 billion; bond maturities capped at c.$3 billion in any
given year
– Spot illustrative annualised free cash flow generation of c.$10.6 billion from Adjusted
EBITDA of c.$22.6 billion
CLIMATE AMBITION
– Extensive stakeholder engagement on progress with our Climate Action Transition Plan
during the year.
– There was broad support for our climate strategy, recognising the importance of
maintaining a strategy that remains resilient to the risks and opportunities of the evolving
energy transition, and encouragement to continue our focus on progressing towards our
ambition of achieving a net zero total emissions footprint by 2050.
– A limited number of shareholders looked for opportunities to accelerate our current total
emissions reduction pathway (50% reduction by 2035), while some raised the prospects for
incremental growth in our coal production. However, the overwhelming majority of
shareholders reiterated their support for our current responsibly managed coal decline
strategy and associated targets.
– Our emissions reduction targets remain sector leading for total emissions (Scope 1+2+3)
along with our ambition to achieve Net-zero total emissions by 2050, with a supportive
policy environment.
– Our strategy of responsibly depleting our coal portfolio over time reflects our belief that
the energy transition will be non-linear through time and geography, with the responsible
decline of our coal portfolio meeting critical energy needs through this evolution.
– We will continue to engage with our stakeholders as we progress the implementation of
our strategy and respond to the global challenges of climate change and the energy
transition.
To view the full report please click here: https://www.glencore.com/dam/jcr:be9ac3b7-a19c-
4925-9554-3db0733101e4/GLEN-2022-Preliminary-Results.pdf
To view the full report on the Johannesburg Stock Exchange portal please click here:
https://senspdf.jse.co.za/documents/2023/JSE/ISSE/GLN/2022-PRes.pdf
For further information please contact:
Investors
Martin Fewings t: +41 41 709 2880 m: +41 79 737 5642 martin.fewings@glencore.com
Media
Charles Watenphul t: +41 41 709 2462 m: +41 79 904 3320 charles.watenphul@glencore.com
www.glencore.com
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 responsibly-sourced 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 enable
decarbonisation while meeting the energy needs of today.
Glencore companies employ around 135,000 people, including contractors. With a strong
footprint in over 35 countries in both established and emerging regions for natural resources,
our marketing and industrial activities are supported by a global network of more than 40
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.
Glencore recognises our responsibility to contribute to the global effort to achieve the goals of
the Paris Agreement. Our ambition is to be a net zero total emissions company by 2050. In
August 2021, we increased our medium-term emission reduction target to a 50% reduction by
2035 on 2019 levels and introduced a new short-term target of a 15% reduction by 2026 on 2019
levels.
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. Such statements may include, but are not limited
to, statements in respect of trends in commodity prices and currency exchange rates; demand
for commodities; reserves and resources and production forecasts; expectations, plans,
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visions, milestones and aspirations; approval of certain projects and consummation of certain
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or be achieved.
Forward-looking statements are not based on historical facts, but rather on current predictions,
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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 event, results, performance, achievements or other outcomes
expressed or implied by such forward-looking statements. Important factors that could impact
these uncertainties include, but are not limited to, those disclosed in the risk management
section of our latest Annual Report and Half-Year Report (which can each be found on our
website). These uncertainties may materially affect the timing and feasibility of particular
developments. Other factors include, without limitation, the ability to produce and transport
products profitably; demand for our products; changes to the assumptions regarding the
recoverable value of our tangible and intangible assets; changes in environmental scenarios and
related regulations; recovery rates and other operational capabilities; health, safety,
environmental or social performance incidents; natural catastrophes or adverse geological
conditions; the outcome of litigation or enforcement or regulatory proceedings; the effect of
foreign currency exchange rates on market prices and operating costs, and actions by
governmental authorities, such as changes in taxation or regulation, and political uncertainty.
Neither Glencore nor any of its affiliates, associates, employees, directors, officers or advisers,
provides any representation, warranty, assurance or guarantee that the occurrence of the
events, results, performance, achievements or other outcomes expressed or implied in any
forward-looking statements in this document will actually occur. Glencore cautions against
reliance on any forward-looking statements.
Except as required by applicable regulations or by law, 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 past
performance cannot be relied on as a guide to future performance. 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. Certain statistical and other information about Glencore
included in this document is sourced from publicly available third-party sources. As such it has
not been independently verified and presents the view of those third parties, but may not
necessarily correspond to the views held by Glencore and Glencore expressly disclaims any
responsibility for, or liability in respect of, such information.
Due to the inherent uncertainty and limitations in measuring greenhouse gas and air emissions
and operational energy consumption under the calculation methodologies used in the
preparation of such data, all greenhouse gas and air emissions and operational energy
consumption data or volume references (including ratios and/or percentages) in this document
are estimates. There may also be differences in the manner that third parties calculate or report
such data compared to Glencore, which means that third-party data may not be comparable to
Glencore’s data. For information on how we calculate our greenhouse gas and air emissions and
operational energy consumption data, see our latest Reporting criteria for selected KPIs, Climate
Report and Extended ESG Data, which can be found on our website.
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.
Sponsor
Absa Corporate and Investment Bank, a division of Absa Bank Limited
Date: 15-02-2023 09:00:00
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